Posts Tagged ‘minimum payment’

CARD Act of 2009 Makes Paying Down Your Credit Cards Easier

The Center For Responsible Lending released its analysis of the payment provisions of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (the CARD Act) earlier this month. It found that new provisions in the law  require credit card companies to apply any amount paid above the minimum payment to the balances bearing the highest rate of interest.   This translates to a savings of two dollars in interest for every one dollar paid above the minimum payment.

People who will benefit the most from this are those who carry balances at different interest rates. In the past, credit card companies would apply anything received above the minimum to the balance carrying the lowest interest rate, allowing them to generate more income.  This change won’t affect people with credit card balances at a single interest rate.

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