Information disclosure: Minimum credit card payments
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| Q.4 Should credit card issuers be required to provide disclosure regarding the true cost of interest that accrues when minimum payments are made? |
Consumer representatives across the board supported this proposal and that the information disclosed should be made in a prominent fashion. It was suggested two figures could be provided, one which shows the minimum payment required, another which showed the minimum required to reduce the principal balance.
Banks support providing information to borrowers about the effects of making minimum repayments only and some noted this information was already disclosed. Providing a calculation would prove difficult. It was suggested the issue was one of financial literacy and not regulation.
The remainder of submissions showed mixed support, with general concern about what and how ‘true cost' could work.
