Transcript for 'Know As You Owe': The Hidden Costs Of Credit
You don't -- now it's time to receive the bill in just a matter of days as credit card statements we'll start piling up in your mailbox. Here to talk about some things you should know and a plan to make credit card statements war agreeable. Is Marla blow from the Consumer Financial Protection Bureau -- joining us today from Washington. Happy holidays -- great to see you. But thank you very much happy holidays to you it's a pleasure to be here isn't tell us some things people should be aware -- when they start to get those credit card bill. So import. Only we think people should look at the total amount -- charges that are that are appearing on their statements making sure that all those charges are consistent with what they actually spent. Understanding the due dates and making sure they send their payments in that in advance in time to arrive at the credit card company. Well before the due date that's that's the best way to manage your your credit card account. Now if you overspent for the holidays a lot of people do it can't quite pay all your bills right away what's the best thing today. While you obviously do have the opportunity to -- -- balance on a credit card and you will be charged interest for that for that privilege. And the idea is to make sure you are revolving a balanced on a credit card with the lowest interest rate possible -- most of if you multiple -- which most people do. Try to find the card with the lowest interest rate and if you have to carry a balance over for a few months. Carry on that card with the lowest interest rate that will save you up a bit on the interest charges that you incur. Over the few months that your intending to revolve which can certainly at -- happens we -- now. Your group recently proposed some changes to credit card agreements and -- part of a proposal called no -- you can you tell us about. Yet some know before you -- is our attempt to simplify credit card. Arraignments and financial agreements broadly speaking we don't know before you -- projects in a few areas including the mortgage space as well as student loans. And credit card is our most recent endeavor in this area. Where we believe the terms and conditions of -- credit card. Are captured in -- -- in -- in a document that contains significant legal communication. For for use by other attorneys. And consumers are really struggling to understand exactly what's in that document would -- -- structure that separates the legalese from. The key terms and conditions and information -- consumer needs. Making a digest -- document available to consumers while still enabling the legal protections that the issuers need. That's an idiot just to simplify things make it clear make -- up front. At the beginning so consumers can take a look at a small one page statement maybe in a paragraph and understand what it is that they. -- the idea is that there isn't there is a need for the legal protection that's very clear but that legal communication does not have to -- consumer down. In in their attempt to understand the agreement that there entering into of the credit card company right so the idea to bring those two pieces separately. Makes it easier for consumers to get the information they need. But leaves the customer. Not caught up trying to Parse through. There against legal legal language sounds very reasonable with the proposal being received -- So far we've gotten fairly good feedback there is there is a significant amount of engagement on this -- in the industry. We're collecting feedback from issuers and we really hoped to be it would get to a test. Some time in -- first half of 2012. To understand exactly how well this works. And that's very -- and that's obviously the next step to getting know before you I'll put in place how many hurdles then you pay. We do -- a fair number -- there are a few specific hurdles on the legal content of the document and we what we created is a prototype that is not at all -- an actual document itself. We have to actually sit down with attorneys from an issue were and put the language and that they need for their specific agreements understand exactly how that works. Get that. Get the contract in the hands of some actual consumers and then get their feedback to understand exactly how well this works because right now it's -- theory. We believe this worse but we have the opportunity to actually test it and learned. In the marketplace we want to actually take advantage of that opportunity and once we understand that then we can figure out what the next steps are how best to actual -- this. Do you expected to change consumer behavior in other words it's one thing for a consumer to. Sort of understand exactly what they -- when -- -- -- but it's another thing for them to actually take that information and change their behavior. Well what would. Leave is that it's important for consumers to be able to understand what's in their agreements and to extend the -- do you understand what you've entered into. We believe you are more likely to two feet to treat the product and and use the product more effectively we are not specifically targeting consumer behavior here but more consumer understanding and. -- now you actually have a section on your website where people can file a complaint. About their credit card company to help the process and -- of complaint that you are -- -- Yet the consumer the consumer finance dot gov web site does receive complaints on credit cards today. And we often find that there -- there complaints related to. Inability to understand their their agreements. And sources of concern related to product returns product quality. Those are areas where consumers typically have a fair number of questions and and those -- end up with us -- our process then is to. Work with both the issuer and the consumer and to get them in contact with -- each other. In the idea of being able to facilitate. As as quickly as possible resolution to their to their question should. And are you able to help most people that -- have an issue or are you overwhelmed inundated with people and there are lucky if they can get some help now we'll have been. Able to help most of the people that contacted us and we do you have the band with the capacity to feel the field all the responses are all complaints have come in the sparks and that's where are we are -- -- That's great so what do you say that success rate and the program. Which -- site which program under -- program while that the website that you have. So far we're very pleased with how it's performing there are some efforts going to -- to broaden the use of the web -- so that we can make it an even better source for for the consumer broadly speaking. But in general at the current time we are really happy with house performance it sounds wonderful -- blow from the consumer financial protection. -- -- thank you so much for joining us today thank you it's my pleasure happy holidays when you.
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