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More than 4 million fear they`ll be made redundant Consumers took on more mortgage debt in July Debts called in by parents Teenagers `scared of debt` Rising household costs could pressure people in debt Pensions debt may impact workers` retirement funds Welsh young adults `at highest risk of debt problems` Over 50s can`t afford to enjoy retirement because of debts Budget: tackling the nation`s debt Short-term debt: `no need for price control` The cost of clearing debt Education debt Tackling the national debt Number of mortgage deals on offer exceeds 3,000 Almost 5 million take on debt to pay household bills OECD: household debt more than 120% of disposable income Petrol price falls help people in debt Amount of mortgage debt taken on at lowest level in ten years Northern Ireland sees significant IVA rise Overdraft debt `becoming more expensive`

US: new law provides debt-free date

02/02/2010

Thanks to a new law, credit card providers in the US will now have to tell their customers how long it would take them to clear their debt if they made just the minimum payments.

As The Financial Times reports, millions of Americans with credit card debt `are in for a dose of harsh reality when they open their February credit card statements`, since the law now requires their card issuer to tell them how long it would take to clear their debt making the minimum payment every month.

Statements will also have to inform the borrower how much they`d need to pay every month in order to clear their debt in 36 months - along with how much they`ve paid in interest and fees in the year to date.

Given that the average American household is carrying $10,000 (around £6,300) of credit card debt, paying the minimum every month would mean it takes them 48 years to clear that debt (at an annual interest rate of 18%) - assuming they took on no new debt in that time.

Jonathan Zinman, a Dartmouth College economics professor, commented: "Many people underestimate how expensive it is for them to borrow, and some are just humming along month-to-month not thinking at all about paying the balance off in full."

As in the UK, many people in the US have made efforts to reduce their debt recently. Credit card debt alone has fallen by 8.7% since early 2008, and now stands at $874 billion (around £550 billion).

"No-one should take on debt unless they have a clear idea of how they`re going to pay it off," said a spokesperson for Debt Advisers Direct. "For people who are already carrying credit card debt, it`s well worth talking to a debt expert and/or spending some time with an online `credit card calculator`, to find out how much money they could save by repaying their debt more quickly."

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Debt Advisers Direct offer free debt advice and a range of debt solutions, including debt management plans, debt consolidation loans and IVAs (Individual Voluntary Arrangements).

More than 4 million fear they`ll be made redundant 16/12/2010 - According to R3`s quarterly personal debt tracker, more than 4 Consumers took on more mortgage debt in July 26/08/2010 - Consumers took on £2bn more mortgage debt than they repaid Debts called in by parents 26/08/2010 - According to research, `the bank of Mum and Dad` is Teenagers `scared of debt` 19/08/2010 - Nearly two thirds of teenagers are `scared` of debt, according