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Is the CARD Act helping Illinois consumers find debt relief?

The Credit Card Accountability, Responsibility and Disclosure Act (CARD) took affect nearly three years ago. Since that time, it is speculated that it has provided many consumers, including some in Illinois, with much needed debt relief. The trade-off, however, seems to be that obtaining and keeping a credit card has become more expensive.

For instance, annual fees on credit cards have increased over 41 percent. In addition, interest rates of many cards have gone up a percentage point. Many consumers are also making bigger payments.

These larger payments has been credited by some as having been the result of a requirement that credit card companies inform their customers how long it will take and how much it will cost in interest for them to pay off their balance if they only make the minimum payment. At the same time, they are also required to let consumers know the amount of the payment it would take to pay off the balance in three years and how money can be saved by not paying additional interest. A survey showed that this information spurred 45 percent of those surveyed to make larger payments.

For people who have the means to take advantage of this seemingly simple debt relief option, it can mean being debt free a lot sooner. However, there are still many people in Illinois who are struggling to make it from paycheck to paycheck. For these consumers, bankruptcy could be the best debt relief option. Once debts are discharged, they too may be able to experience the same feeling of being debt free.

Source: Fox Business, Are Credit Cards More Expensive Now?, Janna Herron, Sept. 18, 2013

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