Fifty-three percent of respondents to an online poll by the National Foundation for Credit Counseling (NFCC) have never noticed the phone number directing them to a credit counseling agency that's listed on their credit card statement.
Because of 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 cardholders debt under various scenarios.
The CARD Act has benefited consumers by increasing transparency and limiting fees and interest rate hikes, said Gail Cunningham, NFCC spokeswoman, citing the Consumer Financial Protection Boards 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 consumers 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.
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%
B. No = 34%
C. I didnt know such a number existed = 53%
The NFCCs September Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from September 130, 2013, and was answered by 917 individuals.