Posted on 11/13/2007 7:52:35 PM PST by Chickensoup
Your credit card payment just doubled
The big players have raised minimum payments from 2% to 4% of your balance, meaning you'll get out of debt much quicker. Here's how to cope until that day.
Good news: Credit card companies are doubling their minimum payments.
Bad news: Credit card companies are doubling their minimum payments.
Huh?
So far, MBNA, Citibank and Bank of America have announced they are doubling minimum monthly payments on credit card balances from 2% to 4%. Others are expected to follow suit quickly. To some cardholders, that could be seen as a good thing. To others it could be devastating.
If you can handle the increased payment it's good. Let's face it, if you pay only a 2% minimum each month, your debt would probably last longer than most marriages. Doubling your minimum might put you back on the financial straight and narrow. Ostensibly designed to help consumers get out of debt faster, the increased minimums will force cardholders to pay off fees, interest and at least a portion of the principal each month.Find a loan that's right for you at the Loan Center
But if you simply can't make that doubled minimum month after month, it could put you and many other debtors in over your head.
Why it's happening Over the past few years, low minimum payback rates of between 2 and 2.5% have encouraged Americans to spend, spend, spend --
snip
"People are now in a revolving debt cycle that they'll never escape," says Adam Brauer, a debtor advocate and in-house counsel for Debt Settlement USA in Scottsdale, Ariz. "So the government nudged credit card companies into saying, 'This isn't working.'"
(Excerpt) Read more at moneycentral.msn.com ...
Let's see the consumer is facing record high oil prices, a number of people are facing forclosures, there are record high property taxes and now the the govrenment is going to help us all by increasing our cc payments for our own good.
And those turkeys in the government colluded.
I searched this story online, not much out there except for marketing pap like this article.
Any articles or insight would be appreciated.
Isn’t this development as of 2005?
The only cards on which I make minimum payments are my 0% for 18 months offers.
It was 1% minimum payment a few years ago, then 2%, now 4%. I think it’s a step in the right direction although question the timing of doubling it with home equity getting shredded.
Not ours,,free since 1984
No, it went from 1% to 2% then.
It also will flow money into the Cash strapped banks facing a credit and liquidity problems.
Keep debt low, pay it off in full at the end of the month, no exceptions.
Old article...
See FR Search
Your Credit Card Payment Just Doubled
Posted by ex-Texan
On News/Activism ^ 02/01/2006 4:08:55 PM EST • 81 replies • 2,673+ views http://www.freerepublic.com/focus/search?m=any;o=score;s=%20Your%20credit%20card%20payment%20just%20doubled
Regardless of the financial sense it makes, people, and, therefore, an economy, can only take so many price increases at once...
An econony based on debt,,not worth...?
Actually, mine were 2% for the most part from 1995 (first year I had a CC) to last year.
Paying the minimum on a 0% to 1.99% interest isn’t dumb as long as you can really afford it. Put the money in a CD or something and earn money off the credit card—or pay off higher interest debt such as car or student loans.
This should be good for bankruptcy lawyers.
My c.c. bill didn’t double.
I pay the full amount every month.
I haven’t paid finance charges in 10 years.
Yes, but many companies required only 1%. I had 5 credit cards in 2000 that only required 1% when I was in college. I thought that was great for about 2 years.
In 2005 the went up 2%
in 2007 it is going up to 4%
It probably will not stop.
Some people may do it only temporarily until their financial situation improves.
Indeed. I guess with the newer bankruptcy laws the banks feel more comfortable doing this.
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