Credit card doubling minimum monthly payments.

[dave502d]

Good news: Credit card companies are increasing their minimum payments.

Bad news: Credit card companies are increasing their minimum payments.




Huh?

Recently, MBNA, Citibank, and Bank of America have announced they are doubling minimum monthly payments on credit card balances from 2 percent to 4 percent. Others are expected to follow by hiking the percentage of their minimums in the near future. 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-percent minimum each month, your debt would probably last longer than most marriages. Hiking 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.

http://www.bankrate.com/brm/news/debt/20050503a1.asp

[Bluebear]

1. Designed to create defaults

At which point ALL your cards go up to 24.99%. Oops! You lose! :crazy:

[mtnester]

9. Yeppers...If you do not meet your minimum payment

your interest rate goes from whatever it is now to 24.99%...no notice required, PLUS, the newer higher interest rate goes retro back to the first day of the charge...so said the new "privacy statement" I received from my own credit card company Saturday.

[Carolab]

2. Good news for debt consolidation companies, I'd say....n/t

[sarcasmo]

3. Ironic how quickly they did this after the Bankruptcy bill passed.

You can again thank the Republicans.

[Bluebear]

4. That was just a COINCIDENCE!

Why do you hate America? :crazy:

[JanMichael]

7. You just echoed my wife.

Surprise surprise.

[Deja Q]

10. Uh, look at who said 'Aye'. It was HARDLY a party line thing.

Sorry.

[phantom power]

5. Wow.

How badly would you have to abuse credit-cards, to reach the point where you can't pay more than a 2% minimum?

[doodadem]

6. Banks are totally out of control

I'm having trouble with two accounts right now. Both of them are with banks that were recently bought out by other banks. They immediately come in and get stupid. On the first one, they more than doubled my visa rate, from 12% to 29%. On the second one, a local bank I had accounts with for 14+ years--personal and business checking, money markets, equity, 401K, multiple auto loans. Never had a problem, always very helpful. New bank buys them, and they immediately start sending me late notices on the auto loan. I know good and well that is not the case. So now they're trying to tack on an additional $100 a month in fees. I'm just going to pay the damn thing off, but it's annoying as hell.
Customer service? Good customer relations? Gone the way of the dodo bird. I don't understand biting the hand that feeds you.

[Systematic Chaos]

8. So they can double the amount they're not getting from me anymore?

Good for them. After everything I've been through this past two years they can put me down and bury me in the back 40 before I'll give them an effing dime. :P

[Deja Q]

11. What about people on counseling plans?

I pay on time and set to rules THEY made.

Can they change them?