a suggestion for the credit card company regulators

fizzydrink

i was checking my credit card balance this morning and just had a lightning moment.

in every statement, we are told by the credit card companies what our minimum payment is. but what i would also like to see is how long it would take to pay off the debt if we were to pay the minimum amount monthly.

something along the lines:
"By paying the minimum amount it will currently take 24 months to clear your balance."

would something like that be possible?
how would one go about forwarding suggestions like this?
would anyone like to drive the idea?

jamalfatty

Unless this is legislated for or built into regulations I dont see any of the banks going for it. Good idea in theory but would only spur people on to make larger/quicker payments which is the opposite of what they want

mrsmortenharket

Give or take a word or two, most say something along the lines of

if you make only the minimum payments each month, it will take you longer & cost you more to clear your balance.

I see your point, but the credit card companies cannot babysit you. You spend the money & you pay it back. Spend what you can afford to pay back.

CLAPTON

wouldn't it be even better to put a 'cigarette style warning' on instead

something like

'spending money you don't have and paying interest can fatally affect your financial health and is plain stupid'

Milarky

There is something a bit like this in the 'total cost of credit' references in you card's terms and conditions. However these interest rates will probably be out of date now, and it uses a 'contrived' example of paying off £1500 ('€2000' in old money?) over 12 months. Far more helpful than a period of time estimate, I would have thought, is a similar 'total cost of credit (assuming payments of £XX)'

As all card can have different minimum payments, standardising the £XX does make sense - at 4% of balance the current balance, for example. From the 'total' it becomes a simple matter to work out for oneself how many payments/months this represents [e.g if you have debt of '£[B]1760[/B]' and are advised the total cost of repaying @4% ('£70.40') is '£[B]2535[/B]' then that's 36 payments]

mrsmortenharket

CLAPTON wrote: »

wouldn't it be even better to put a 'cigarette style warning' on instead

something like

'spending money you don't have and paying interest can fatally affect your financial health and is plain stupid'

Thats really good!!!

~Brock~

fizzydrink wrote: »

but what i would also like to see is how long it would take to pay off the debt if we were to pay the minimum amount monthly.

By definition, if you only ever pay the minimum payment then you will never pay it off, because your minimum payment reduces along with your balance :rolleyes:

CLAPTON

~Brock~ wrote: »

By definition, if you only ever pay the minimum payment then you will never pay it off, because your minimum payment reduces along with your balance :rolleyes:

This isn't normally the case, as most CC companies have a absolute minimum monthly payment (say £5 or 25) as well as a percentage monthly payment: the actual required payment is the greater of the two.