Department of Financial Institutions Makes Informational Chart about Minimum Payments on Credit Cards Available on its Web Site
Chart demonstrates the amount of time it would take for cardholders to completely pay off a credit card debt at various interest rates when only making the minimum payment
SACRAMENTO - The Department of Financial Institutions (DFI) today announced that they have responded to AB 865 (Chapter 711, Statutes of 2001), which requires a credit card issuer to provide cardholders information regarding the length of time it will take to pay off the balance due on an open-end credit card account.
As part of AB 865, DFI was required to establish a detailed chart illustrating the approximate number of months, in addition to the approximate total cost, to repay an outstanding balance if the cardholder pays only the required minimum monthly payments. Each page of the chart represents a different account balance amount beginning with $100 and increasing in $100 increments to $10,000. The chart also includes a list of interest rates beginning at 6 percent and increasing by 1 percentage point to a maximum of 25 percent, and minimum payment due ("MPD") of either 2, 3, 4, 5, or 10 percent of the balance of the original outstanding balance.
"While the chart was designed for the credit card issuer to provide this information to cardholders, the Department has made the chart available to all interested parties at our Internet site," said Donald R. Meyer, State Commissioner of Financial Institutions. The chart is available at www.dfi.ca.gov under the home page heading Minimum Payment Credit Card Calculation - as required by AB 865 (Civil Code Section 1748.13).
The Department of Financial Institutions is responsible for administering the State's laws regulating state-licensed banks, state-licensed savings and loans, trust companies, state-licensed offices of foreign banks, issuers of travelers checks and payment instruments (money orders), transmitters of money abroad, state-licensed credit unions, and state-licensed industrial banks. DFI reports to Secretary Maria Contreras-Sweet of the Business, Transportation and Housing Agency and Governor Gray Davis.