Over the course of the last year, you've undoubtedly noticed some changes to your credit card statement, including more detailed information on how much you would have to pay per month to eliminate your debt in three years and how long it would take to eliminate your debt if you made only the minimum monthly payments. These disclosures were mandated by congress as part of the CARD Act, a measure designed to introduce debt relief for consumers by giving them a straightforward -- and perhaps sobering -- summary of their debt.

As it turns out, however, these disclosures -- particularly as they relate to minimum monthly payments -- may not be entirely effective.

According to a survey by the Consumer Financial Protection Bureau, 70 percent of consumers indicated that they noticed the new CARD Act disclosures on their credit card statements, but only a third indicated that it made any difference in their credit card spending/payment habits.

In addition, another study by a researcher at Boston College revealed that many consumers -- including those who may be considered financially savvy -- are still being drawn to making only the minimum monthly payments on their credit card balances despite CARD Act disclosures.

This is significant because making only the minimum monthly payments on credit card debt typically ends up costing consumers far more in the long run and also leads to the accumulation of even more credit card debt.

"[Consumers] believe that because they're making this tiny payment every month, they are above water, when, in actuality, they're not," said one New York-based bankruptcy attorney. "It's really a huge problem because consumers then spend so much more and pay so much more in interest because of this unrealistic sense of security that a minimum brings with it."

Accordingly, financial experts recommend that consumers avoid the temptation of minimum monthly payments and always attempt to pay down as much of their credit card balance as soon as possible.

In addition, they indicate that some credit card companies are offering favorable terms over the holidays, such as low introductory balance transfer rates lasting for upwards of a year or longer.

Stay tuned for more from our Phoenix bankruptcy blog ...

Whatever the cause, whatever the reasons behind your financial difficulties, take the time to speak with an experienced legal or financial professional if you would like to learn more about Chapter 7 bankruptcy, Chapter 13 bankruptcy or additional debt relief options.

The following post is for informational purposes only and is not to be construed as legal or financial advice.

Source:

Reuters, "Credit cards: How to avoid getting tricked this holiday season" Dec. 2, 2011