Published July 1, 2009 | July 2009 issue
The Board of Governors of the Federal Reserve System (Board) has created an online calculator that can help consumers identify the true cost of credit cards. The Credit Card Repayment Calculator at www.federalreserve.gov/creditcardcalculator asks users to enter the balances and annual percentage rates of their credit card accounts. The calculator then determines the total amount of interest and time required for users to pay off their balances if they made only the minimum monthly payment. The calculator is available in English and Spanish and is accessible via touchtone telephone, toll-free, at 888-445-4801.
The Board created the telephone version of the calculator in part to help some creditors comply with a new disclosure requirement contained in recent amendments to Regulation Z, the implementing regulation for the Truth in Lending Act. Under the requirement, which becomes mandatory on July 1, 2010, creditors must disclose on their periodic account statements a toll-free telephone number that consumers can use to obtain an estimate of the time it will take to pay off their credit card balances. Creditors that are depository institutions must either establish and maintain their own toll-free numbers or use third-party numbers. Depository institutions having assets of $250 million or less may use the Board's toll-free number for up to two years to satisfy the requirement.