Mixed blessing: credit card reform may shock some

Yahoo! Finance News / AP ^ | February 21, 2010 | Eileen Aj Connelly

[danielmryan]

NEW YORK (AP) -- Your next credit card statement is going to contain an ugly truth: how much that card really costs to use.

Now, thanks to a long-awaited law that goes into effect Monday, you'll know that if you pay the minimum on a $3,000 balance with a 14 percent interest rate, it could take you 10 years to pay off.

"Jaws will drop," said David Robertson, publisher of The Nilson Report, a newsletter that tracks the industry. "I don't doubt for a nanosecond that it's going to give a lot of people a sinking feeling in their stomachs."

That's not all that will make them queasy.

During the past nine months, credit card companies jacked up interest rates, created new fees and cut credit lines. They also closed down millions of accounts. So a law hailed as the most sweeping piece of consumer legislation in decades has helped make it more difficult for millions of Americans to get credit, and made that credit more expensive.

It wasn't supposed to be this way....

[Jolla]

I do recall that from around 2nd or 3rd grade. Unfortunately with the current interest rates, it is not too interesting.

[Cronos]

For example, if you bought a watch for $1,000 in 30 years when you turn 65 that could have been $4,000. It made an excellent point.

Or, if you had invested that money in the Bovespa, Shanghai or Sensex between 2004 to 2007, that $1,000 would have become $4,000 or more in 4 years....