But many who struggle with credit card debt are still not getting the message from card issuers that help is available.
Washington, DC (PRWEB) October 29, 2013
Fifty-three percent of respondents to a recent online poll by the National Foundation for Credit Counseling (NFCC) have never noticed a useful piece of information on their monthly credit card statement: the phone number directing them to a credit counseling agency.
Thanks to the Credit Card Accountability Responsibility and Disclosure, or CARD, Act, card issuers provide consumers with a toll-free number on their monthly statement to a credit counseling agency for help with financial concerns. The number is usually near the box on the statement that shows how long it will take to pay off the cardholder’s debt under various scenarios.
“The CARD Act has benefited consumers by increasing transparency and limiting fees and interest rate hikes,” said Gail Cunningham, NFCC spokesperson, citing the Consumer Financial Protection Board’s October 2013 Report on the CARD Act. “But many who struggle with credit card debt are still not getting the message from card issuers that help is available.”
Consumers can have confidence when reaching out for help with their financial concern because the phone number on their statements will connect them to a trustworthy nonprofit counseling agency, Cunningham said. “We encourage card issuers to make certain they display the number prominently on the statement so consumers who need to improve their financial situation are aware of the credit counseling option,” she said.
In addition to being aware of the toll-free number to a credit counseling agency, it is in the consumer’s best interest to carefully review the other elements of their monthly credit card statements, Cunningham added.
- Noting due dates can help consumers plan their payments, stay current, and avoid the late fees and penalty interest rates allowed under the CARD Act. Issuers may charge a late fee of $25 with the first late payment, and with 45 days notice, increase the APR to a higher interest rate on new purchases. However, consumers who make late payments more than once in a six-month period may be assessed a higher late fee with the penalty APR also applied to existing balances. These increased fees and interest can add up quickly, turning a bad situation into an unmanageable one.
- Confirming that all purchases are legitimate is an ideal way to detect identity theft, while making sure that all credits have been recorded protects from overpayment. This can also be a useful tool to track spending for budgeting purposes.
- Reviewing how long it will take to pay off debt by making only the minimum payment each month can provide consumers with the kick-start they need to work toward reducing debt faster. Nearly two in five Americans carry credit card debt from month to month, so with interest added onto the balance each month they end up paying interest on the interest. This is particularly useful information to have with the end-of-the-year holiday shopping season quickly approaching.
To help consumers know where they stand financially, the NFCC’s new MyHolidayCheckUp tool, online at http://www.MyHolidayCheckUp.org, provides them with a free, customized analysis of their personal financial situation, which can lead to smarter holiday spending decisions.
“It’s important all year round for consumers to understand and take control of their finances, but it’s even more critical to make that effort before they begin taking on new debt through holiday spending,” Cunningham said. “MyHolidayCheckUp is an effective way for consumers to do just that.”
Consumers can learn more about managing their overall finances by visiting the Sharpen Your Financial Focus website, http://www.SharpenToday.org, or calling toll-free 855-3-SHARPEN (855-374-2773) to schedule an in-depth financial review with an NFCC Member Agency.
The NFCC September poll question and results are below:
I have called the number on my credit card statement directing me to a credit counseling agency for help.
A. Yes = 14 percent
B. No = 34 percent
C. I didn’t know such a number existed = 53 percent
Note: The NFCC’s September Financial Literacy Opinion Index was conducted via the homepage of the NFCC website (http://www.DebtAdvice.org) from September 1–30, 2013, and was answered by 917 individuals.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit credit counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help millions of consumers through more than 600 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit http://www.nfcc.org. Visit us on Facebook: http://www.facebook.com/NFCCDebtAdvice, on Twitter: twitter.com/NFCCDebtAdvice, on YouTube: http://www.YouTube.com/NFCC09 and our blog: http://financialeducation.nfcc.org/.