The new credit card law that went into effect on Monday, February 22, 2010 is one of the few good things to come out of the economic mess. In particular, I like the disclosures in the new statements. So many times clients come to office and they are fooling themselves. I ask about credit card debt, and they answer: “No problem. I’m paying on it.” The minimum I ask? And they say yes. The new statements tell them the truth. Here’s an example from a client’s most recent statement:
– New balance: $6,798.80
– Minimum payment due: $136.00
– Amount of time necessary to pay this balance paying only the minimum: 17 years (!)
That’s the shocker. Chapter 7 bankruptcy will clear this debt in 4 months. Do the math. Which is quicker way to increase your net worth?
This firm pushes no one into bankruptcy. But when all you can afford is the minimum payment, 17 years is a long time to be a financial slave. Now, for once, the credit card lenders are telling you the truth!