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Credit Card Statements and Notices: Four New Reasons to Read Them Carefully

by Barbara Marquand

You've always relied on your credit card statement to see how much you owe, check transactions against receipts, and learn how much remaining credit you have.

Now your credit card statement provides even more information, thanks to new federal credit card regulations. Here are four new reasons you should carefully read your statement and any other notices your credit card company sends you:

• Heads Up on Changes to Credit Card Terms.

Don't assume that credit card company notices are junk mail. They might contain important information on proposed interest rate or fee increases. Under the new federal credit card rules, credit card companies can't raise interest rates on current balances unless you're 60 days late, or in the first year of an account. After that, they must give you 45 days notice of any changes in terms on new purchases and the chance to opt out of the card. Read those notices carefully so you can exercise your right to opt out if the terms aren't to your liking.

• The Real Costs of Credit Card Debt in Black and White

Financial experts harp against the practice of paying only the minimum due every month. Now you can see why in your credit card statement. Credit card companies must disclose how long it would take you to pay off your balance if you paid no more than the monthly minimum due amount. Consider this example from the Federal Reserve: You have a $3,000 balance on a credit card with 14.4 percent interest, and the minimum due is $90. The credit card statement tells you that it would take 11 years to pay off the balance, and you would pay $4,745, assuming you didn't charge anything else and you continued paying only the minimum due.

• How-to Numbers for Paying Off Credit Card Debt

If 11 years sounds outrageous, and it should, you can learn how to eliminate the balance faster. The new credit card rules require card issuers to disclose how much you'd need to pay every month to pay off the balance in just three years. For a $3,000 balance at 14.4 percent interest, for instance, the answer would be $103 every month.

• Where to Call for Help

Credit card issuers must provide a toll-free number in each statement where you can call to get credit counseling and debt management services.

Published 03/29/10 (Modified 03/30/11)

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