WHERE was it seen that credit card companies will be...

[liberalitch]

increasing minimum payments by 100%?

Link?

[sui generis]

1. they're "complying" with a law that says that a minimum payment

must also pay down a portion of the debt and not just interest.

The real truth of the matter is that they can up your interest rate if you haven't been doing more than pay the minimum payment because you are a credit risk based on not reducing your balances.

A win win situation for them, go figure.

[liberalitch]

3. That in addition to the new bankruptcy law......

wow.... what a christmas gift.

[Norquist Nemesis]

8. They can also up it if you're late on one of your other CCs

...at least that's what the local news is warning everyone around here about. The logic supposedly is that if you're an increased risk for one, you're increased for all. Of course, this cost of increased risk drives you deeper into the hole. But, don't worry! Be happy! Lalalalala skippety do dah!

(We got rid of our CCs a few years ago, so I haven't dug into all of the details about it.)

[sui generis]

13. basically, here's how it works legally

CC companies aren't required to tell you that they are a universal default participant -- you have to ask them and they will respond in writing.

If they are not, they can't do it. Most "discount" credit card companies are.

Even if they are not, they can amend your agreement at any time, giving you the option to continue to keep your credit card open or pay off the balance. If you decline to accept the agreement change, they lock your credit card, but can't raise your rate.

Clearly, don't accept the agreement change, and read ALL your mail, closely.

[KansDem]

14. Happened to me...

A couple of years ago I was having financially difficulty. I thought I would try to make regular payments with one CC company and struggle along with the others. Well, I received a letter from that one company informing me that due to my payment history (with those other companies--I think they referred to it as a "review of my credit report"), it would raise my interest rate 4%.

...and read ALL your mail, closely.

Ain't that the truth! Especially the teeny-tiny, light brown (as to make it even harder to read) print on the back of the statement.

[lectrobyte]

2. lots of news stories on it, here's one

http://abclocal.go.com/wjrt/story?section=consumer_affairs&id=3682274

excerpting a bit:

You know that minimum payment you get on your credit card statement every month? It's only about two percent of you total balance.
"But quite often the interest is like one percent or one-and-a-half percent of the unpaid balance, so sometimes a dollar or so goes on to the principle," explained credit counselor Nancy Kennedy.

If you have a $2,000 bill with an 18 percent interest rate, it will take 34 years to pay the card off if you make only the minimum payment.

Keeping that in mind, lawmakers are pushing credit card companies to double minimum payments to about four percent. It's an effort to help Americans dig out of debt faster.

[depakid]

4. An effort to help! LOL

The far right media has no shame at all.

If and when things really get bad, I sincerely hope when the sheeple are looking for scapegoats, that someone points the finger directly at the owners, editors and some of the reporters who've made it all possible.

[mark11727]

9. One of our credit cards (CH*SE V*SA) jacked the APR way, way up...

So we use it exclusively for gas, and it gets PAID IN FULL every month.

Doesn't cost us a DIME to use, and this must be driving them crazy for the past year.

Of course the other cards we have are making some nice money off us, but they haven't been greedy about it, neither. We only use one card for our day-to-day purchases, and the remaining cards them have very modest APR's for transfers only --- we moved our other debts there, and after cutting those cards up, we are paying them off at between 4 and 6 percent each.

[Greyhound]

10. In conjunction with the new bankruptcy law the CC Companies

have legislated all of the risk to the taxpayers, so there is no justification for the usurious interest rates that raygun allowed. Of couse, we won't hear any talk of capping interest rates for them.

[tx_dem41]

12. The CC companies were against this regulation.

They were the ones that were LOWERING the minimum payments to increase their long-term revenue substantially. It was the consumer groups such as PIRG that pushed for this regulation (to RAISE minimum payments).

[Greyhound]

15. So it's just a coincidence that this law goes into effect after the new

bankruptcy law? I don't think so. How much more profitable is it to force a default by raising payments to the point where the borrower can't make the payment so the interest rate goes into the high 20's and they're forced to pay back as much as they can until it is paid off? Of course the option also exists for them to attach personal assets, this goes hand in hand with the equity lines of credit they're pawning off on homeowners (put your house up as collateral for a few thousand in CC bills). Sheesh, what a great scam.

[tx_dem41]

19. No....lowering the minimum payment was a great "scam"...

an ingenious scam. Please read the history of the regulation on the link provided in post #11.

Why didn't you read the fine print when you borrowed other people's money?

[ThingsGottaChange]

5. Also just read this today...

From a local paper. http://www.nwherald.com/StyleSection/hunt/329646998870981.php

Excerpt:
<snip>
OK, let's analyze this. The big pitch for this credit card is no late fees. So what does that suggest to you? It says to me that if I have this card, I can just go ahead and relax. Don't worry about getting the payment there right on time. But if I take advantage of the feature that lured me in to get this card, I get socked with an outrageous, usurious interest rate of nearly 31 percent.

You know what that sounds like to me? Entrapment. They set up a trap, trick a customer into stepping into it and then clean up by charging outlandish and obscene interest rates.

And for what? To fatten their profit margins so they can come up with new tricks and schemes to fleece even more unsuspecting consumers. <snip>

[sui generis]

7. even worse, with universal default

you don't have to actually be in default. They can just assume that another lender had a valid reason for raising your interest rate, claim universal default and have all your credit cards jack their rates even if you are a perfect customer.

It is long past time for us to take on the credit card companies, head on.

To them, you are sheep, and you will be sheared of your income the whole day long and at the end of the day you'll be mutton stew, but it's okay because your legislators agreed to it. THAT's where you start.

[Terran]

6. I've read in at least one place that this is alarmism

Unfortunately I don't have the link for you. But from what I understand, there will not be a mass movement toward doubling minimum payments because no such thing is required to comply with any law. The new law allows such a thing, and there probably will be increases; but think about the economic consequences of doubling every single person's minimum payments: given the number of people who depend on credit cards, and the number of people who live one or two paychecks away from homelessness, such an action would cause an economic meltdown in this country. Half the extant middle class would immediately fall into poverty. Barring conspiracy theories around intentionally destroying this nation's economy, it's just not going to happen.

[Greyhound]

17. It's not just about destroying the economy, it is the Great Depression

Act II. If you recall your history those that caused/let it happen cleaned up in the next few years because they had the cash to buy assets for 3 - 7 cents on the dollar. They came out of the depression several orders of magnitude better off than they were in the 20's.
That's why they encourage people to put their homes up as collateral for a few thousand dollars of CC debt that can arbitrarily raise interest rates to whatever they want with 30 days notice.

[Terran]

20. I wasn't aware

that anyone had "caused" or "let happen" the Depression. If you recall your history, there were few legal mechanisms in place to prevent the Depression from happening in the first place. What could anyone have done to stop it, other than calling upon the public to stop investing in stocks and buying on credit?

[schmuls]

21. If I recall my reading, the Federal Reserve Bank orchestrated

these foreclosures.

[tx_dem41]

11. Read this GD : Politics link.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x2285039

[pitohui]

16. don't got a link but i saw it on my credit card statement

minimum payment jumped from $20 a month to $40 a month

this is not an issue for me since i live in the katrina affected area and they are offering ways to defer payment if need be, fortunately, i finally got a crowbar under insurance company's rosy red rear end and got my damn money so paying the bill is not an issue anyway

but judging from what it said on my statement, if you live outside the affected area, this policy has now officially started

as a data point, since others say all credit card companies aren't doing this, this was citibank, but all citibank cards are not alike, so yr mileage may vary

i don't actually feel that $40 is an extortionate minimum payment

[Greyhound]

18. Are they deferring the interest too? n/t

[mwooldri]

22. It's not all credit card companies.

Different ones are doing it different ways. The one I work for (clue: not affiliated with Visa, Mastercard or Discover) kept its basic 2% of the balance rule, but changed it that if the finance charges are greater than 2% of the balance then your minimum due is the finance charges plus any late or overlimit fees (if any) plus $15. It's that $15 which would pay down the balance.

Before this change I was seeing accounts where people received the default interest rate and because they were still being billed for only 2% of the balance, the balance was indeed going up. Some nasty examples I have seen was that the account was assessed an overlimit fee as well - the poor person wasn't paying any attention to their balance and called in wondering why their balance was going up. I can't remember exactly what was done but I do remember writing off a good number of those fees to help out this particular individual.

I have talked with a number of customers about this very same concern and advised them the accounts with us were not going this way (unlike the competitor cards) and need not worry about having to find extra money. Some people take a credit card out, put something like $30,000 on it and budget on paying back $600 a month. If it was doubled like some companies are doing to $1200 a month then if their budgets are tight enough as it is, it could force these people into Chapter 13 or Chapter 7 if they are allowed to file that way.

Mark.