Your Credit Card Payment Just Doubled

[sunnystarr]

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.

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.

... the rest of the article is at http://moneycentral.msn.com/content/Banking/creditcardsmarts/P117014.asp

Now that the bankruptcy bill has passed the greedy giants want to collect all they can before the rush on bankruptcy's starts in 6 months. For millions of Americans living paycheck to paycheck this move will drive them to bankruptcy courts by the hundreds of thousands -- but not until they have to decide whether or not to make that payment or feed their kids.

But hey ... at least they voted against the right of a woman to choose her reproductive life and against all those nasty gays ... that's way more important than making the choice of feeding your family or the credit card vultures.

[NVMojo]

1. Here's comes the enema machine for the butthole of America!!!

[BuelahWitch]

2. Six months? The bankruptcy rush has already started

If you're thinking about it, do it before October!

[sunnystarr]

4. I misstated that ... I meant the 6 months before the new law

went into effect. Thanks for straightening that out!

[Demit]

3. The bankrupting of America. Now people will be able to sink faster.

A lot of people were using their credit cards to keep their heads above water. They will now slip all the way under, with no hope of being saved. What good do the powers that be think will come of this? Who will buy all their goods? The American people were propping up this economy with their borrowing. Who will be left?

[blueheeler]

5. Sorry but I have to disagree

This one really is a protection for consumers. Maying a minimum of 2% pays off nearly NO principle and the CC companies make much larger profits in interest, thus saving the consumer money in the long run!!

[unblock]

9. not really. see my earlier post in this thread.

people who can't afford 4% will just charge more to make ends meet, thereby recreating a 2% (or less) minimum payment.

due to the nature of revolving credit, this really won't accomplish much of anything in the way of protecting consumers.

frankly, given that there are advantages to the credit card companies and also given the extraordinary influence they have over the republican politicians, i wouldn't be surprised if they didn't engineer this as something they can claim is a consumer protection thing they didn't want when in fact thay wanted to do it all along.

you can never be too cynical with these corrupt thugs in power these days.

[losdiablosgato]

6. My wife and I pay off our cards every month

We do use them a lot, we get airline miles and points so we buy things we would have normally. But we make sure to pay it off every month.

[unblock]

7. i think most people miss the point of this move, it's not about bk risk

it's about all those low- or no-interest balance transfers.

if your monthly minimum goes up by $100, all you have to do to come up with the $100 cash is to shift $100 more of your routine purchases from cash to credit. in other words, you can pay 4% and charge 2%, thereby effectively restoring your 2% minimum payment.

this is only not possible if your cards have all been cancelled, or if you're already using cash only for those things that MUST be paid in cash (e.g., rent and credit card payments). if you're already at that point, then yes, this could be the feather that breaks the camel's back.


but i think more to the point is that many people (myself included) have taken advantage of all the low- or no-interest balance transfers that credit card companies have been pushing like there's no tomorrow. i've got a 2.99% for life, and a 0% for 12 months, for example. this is cheaper money than my home equity line of credit, so i used the balance transfer money to pay down my home equity.

now, with a 4% minimum payment, my balance transfer will be paid down at a much faster rate than planned, and i can't just do the charge trick mentioned above, because NEW charges are at 16% or whatever, not the 2.99% that only applies to that original balance transfer.

THAT's what the card companies are after. retiring the cheap debt so that it can be replaced with more expensive debt, thanks to rising interest rates.

[onehandle]

10. Yep.

I have one card that's at 2.99% for a balance transfer. It was honestly a good deal.

But I don't need their "pressure" to pay it off. I started tripling my payment as soon as the bankruptcy bill passed.

After that's paid, I'm through with borrowing beyond our house and maybe a car.

[onehandle]

8. Hopefully all DUers are paying up and getting out.

I know it's difficult to pay off debt, but do what you can.

Go bankrupt now if you need to. I know several people who have survived the process and feel So much better.

Hopefully doubling the payment will keep a number of people from borrowing to start with.

[a kennedy]

15. This is horrible to say, but when my mom passed away, we got

a bit of money, and after paying off our house, we paid off our 2 credit cards. We feel great, no more borrowing for us.

[sendero]

11. Sorry to sound sanctimonious...

... but get the hell out of consumer debt.

Borrow money to buy a house, or maybe a car, but never anything else unless you truly have no choice whatsoever.

Now here's the sad reality. The Repugs and their buttlicker business supporters have us all up. They want to have it both ways, to extend EZ CREDIT to folks who really shouldn't have it and to slam them hard when they cannot pay.

What is going to happen here is that the already limping consumer is going to fall down hard. And that is going to screw up this gasping economy even more.

They are killing the "golden goose" and they are too fucking stupid to see it.

[onehandle]

12. I'm sure one of the GOP's main constituents are ready to go.

The Prison Industry.

It would be so easy to take an existing prison design and place it adjacent to factories. That's where the indentured debtors would live while paying off their debt with servitude.

I give you the 21st century poor houses. It's the Chinese...I mean the American Way.

[Kazak]

13. They can quadruple mine if they want...

$0.00 X 4 = $0.00 :D

[KoKo]

14. Kick