Photo: Flickr / breezy421
Two years after being signed into law, Obama’s Credit CARD Act is working. According to Demos’ 2012 National Survey on Credit Card Debt of Low- and Middle-Income Households there are two driving factors:
-Households are clearing debt faster because statements are now required to disclose how long it’ll take to pay off the current balance by only paying the minimum each month.
-Putting limits on late fees and penalties—credit companies must provide 21 days between the time a bill is mailed and when they can charge a fee—has helped households avoid them.
The chart below shows the number of households paying late fees actually dropped since its last survey in 2008. Households paying late were also less likely to get hit with a higher interest rate as a result—in 2012, 29 per cent of households reported seeing their interest rates rise versus 53 per cent in 2008.
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