Question

After looking at (and trying out) the credit card calculator mentioned on page 162, What's On The Web, #5.2, what are your views on credit card companies offering minimum payment options to customers. Is it a benefit to customers? Are they "robbing" customers? Do you have an experience (or know someone who does) that you feel comfortable sharing? What can we do in the U.S. to help protect consumers from credit card debt?

Answer 1

The minimum payment option to customers is a benefit to them since they can avail the loans by paying very less amounts. However they end up paying a huge interest rate on the borrowings. In my view this is not "robbery" since the credit card companies are here to do business. If they are [roviding a facility to the customers they are charging for the same and the customers should make a rational choice. However not disclosing the facts is unfair to the customers.

Hence to protect consumers from credit card unfair dealings, the law should make it mandatory to state the terms and conditions with clear disclosure as to the interest rate charged. The consumers should be enabled to make an aware decision.