Credit, Debt 

Minimum Credit Card Payments Increase

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Are you struggling to make ends meet? Are you drowning in debt? The credit card companies don’t care… and they’re jacking up the minimum payment you now much make from around 2% of your balance to 4%. Are the credit card companies evil? No, part of the reason is because they’re getting pressure by the Office of the Comptroller of the Currency and the new Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. In that new act, credit card companies will need to post on your credit card statement how long you’ll be in debt if you keep making only the minimum payment. Well, news flash folks, if you just make minimum payments then you’ll be in debt the rest of your life.

Honestly, I don’t think credit card companies want to raise the minimum payment because the smaller that payment is the more money they’ll be able to extract out of debtors. However, posting that you’ll be in debt for the next 40 years might shock you into getting your finances in order and ridding yourself of that crushing debt. The good thing is everyone will pay less in interest to the credit card companies. The bad thing is everyone will now have to double their monthly payments and that’ll be very painful for those who are barely making those payments.

If you find yourself in the second category, of barely making payments, you need to have a heart to heart with yourself and take an honest look at your finances. That and start reading the Carnival of Debt Reduction. 🙂

{ 3 comments, please add your thoughts now! }

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3 Responses to “Minimum Credit Card Payments Increase”

  1. samerwriter says:

    Amen. While there will surely be short-term pain from this, in the long-term anything that makes people recognize the folly of credit card debt is a good thing.

    I have a friend who considers the price of an item to be how much he has to spend each month to service the debt. If he wants a $500 TV, he figures it’s only $10/month, and he can afford that.

    And as a result he’s still paying for that TV he bought 4 years ago, and got rid of last year before moving. Some people won’t behave reasonably until they’re scared into it.

  2. mbhunter says:

    I remember in my 7th grade math class we did some problems that computed interest payments. It was related to savings growth, not interest paid on debt. After that, I don’t remember ever hearing any teaching on interest or debt, all the way through high school.

    This information is usually found out the hard way.

    Thanks for mentioning the Carnival of Debt Reduction! Some of the regular contributors are doing yeoman’s service getting out of debt.

  3. ManuelRC says:

    I have Fixed Rate at 3.99%. The credit card company increase from 2% to 5% the capital. I called them and gave me the following options: First, pay the increased amount of payment (my case from $210 to $498)……… or change my fixed rate to 7.99% to lower to 2% the capital. IS IT RIGHT?……….

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