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Government warns about rising credit card debt Debt - the 12-month view Amount of `bad debt` written off reaches 16-year high Deeper into debt: middle-class poverty Debt taken on by individuals increased in January Debt Relief Order (DRO) rules may be changed Overdrafts: five million Britons `permanently` in debt Mortgage lending drops to decade low The cost of debt falls Two thirds hope to have cleared mortgage debt by 50 40% of people approaching retirement `saddled with debt` Repossession `may be best` for homeowners struggling with debt Bankruptcies in Scotland - the worst may be yet to come Good news for people with energy debts US: new law provides debt-free date More debt taken on than repaid in December Savings rise as consumers pay down debt Household debt `could trigger another downturn` More families could fall into debt with energy companies Recession ends

US: new law provides debt-free date

02/02/2010

Thanks to a new law, credit card providers in the US will now have to tell their customers how long it would take them to clear their debt if they made just the minimum payments.

As The Financial Times reports, millions of Americans with credit card debt `are in for a dose of harsh reality when they open their February credit card statements`, since the law now requires their card issuer to tell them how long it would take to clear their debt making the minimum payment every month.

Statements will also have to inform the borrower how much they`d need to pay every month in order to clear their debt in 36 months - along with how much they`ve paid in interest and fees in the year to date.

Given that the average American household is carrying $10,000 (around £6,300) of credit card debt, paying the minimum every month would mean it takes them 48 years to clear that debt (at an annual interest rate of 18%) - assuming they took on no new debt in that time.

Jonathan Zinman, a Dartmouth College economics professor, commented: "Many people underestimate how expensive it is for them to borrow, and some are just humming along month-to-month not thinking at all about paying the balance off in full."

As in the UK, many people in the US have made efforts to reduce their debt recently. Credit card debt alone has fallen by 8.7% since early 2008, and now stands at $874 billion (around £550 billion).

"No-one should take on debt unless they have a clear idea of how they`re going to pay it off," said a spokesperson for Debt Advisers Direct. "For people who are already carrying credit card debt, it`s well worth talking to a debt expert and/or spending some time with an online `credit card calculator`, to find out how much money they could save by repaying their debt more quickly."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

Government warns about rising credit card debt 05/03/2010 - The latest figures from the Bank of England (BoE) have Debt - the 12-month view 04/03/2010 - In January, UK citizens - between them - borrowed £500 Amount of `bad debt` written off reaches 16-year high 03/03/2010 - The latest figures from the Bank of England (BoE) suggest Deeper into debt: middle-class poverty 02/03/2010 - The recession has also affected a lot of people with