New Rules for Credit Card Statements Could Motivate Chicago Consumers to Pay Down Debt
Take a close look at your next credit card statement - what you see might shock you. And that might not be a bad thing.
As part of the recently enacted Credit CARD Act of 2009, card holders in Atlanta and beyond are going to see a lot more information on their monthly credit card bills. Creditors are now required to include forecasts for how much you will shell out during the life of your debt balance - and how long it will take for you to pay off said debt while making minimum payments. For many of us, that could mean thousands of dollars over several decades.
By keeping us in the dark, credit card companies have kept us from looking into the future. Writing a check for our credit bill every month has become so routine, we don't even question how much we will eventually pay out - just how much we are paying in the moment. But by forcing us to confront the real size of our debt, legislators hope we will also confront our credit habits. This might be just the wake-up call we need to start paying down debt - or at least looking into debt relief options like bankruptcy.
Most folks currently choose to pay the minimum and no more. And with times tight, who wouldn't want to pay as little as possible each month? But the problem is, it's all an illusion: by paying less each month, we're actually paying more in the long run. Most minimums are so small they only go towards the interest charged on top of your balance, leaving your original balance untouched. And if your balance remains unchanged (or grows, if you keep using that credit card) you're going to have to keep making payments for - well, for the rest of your life.
Remember, every dollar you pay beyond interest lowers your debt. The more you pay, the less debt you'll have. And the less money you'll spend on future payments.
Of course, at first glimpse of your potential debt burden, you might become overwhelmed. I can't blame you - who wants to think about how last year's Christmas presents could be on your bills 20 years from now? But try turning your shock into motivation. What you're seeing isn't necessarily reality; it's a worst-case scenario. If you pay more than the minimum, then you won't be paying off that balance for 20 years. You have the power to save your future self thousands of dollars. And the sooner you get started, the more you'll save.
Sometimes your debt really might be too overwhelming to handle alone. Fortunately, that's where bankruptcy comes in. The right bankruptcy plan can expedite the debt relief process by offering a payment plan you can afford - or even an opportunity to totally discharge debt. Have more questions about bankruptcy? No problem. We can answer them for free when you sign up for a complimentary debt analysis with one of our Atlanta bankruptcy attorneys.