Rumor of credit card payments going up.

Mom of twins,

This is not a rumor. Minimum payment for credit cards is really going to increase. This transition started to take place from the middle of last year. Most of the card providers are raising minimum payment up to 4%, which is almost double of that of the earlier.

This move has led to lots of debates and controversies. Experts are saying that it is going to help consumers in the long run. Ultimately people will be debt free fast and will be paying less interest in total.

However, filing bankruptcy is not that much easier after October 17, 2005. Those who put minimum payments towards credit card accounts and carry on balance from one month to next month, or living paycheck to paycheck, will find it bitter pill to swallow.

I am not sure whether credit card providers would include the accounts under consolidation in the new scheme or not. So contact your consultant and know if this change is going to affect your payment plan. Also don't forget to post the update here :D

The credit card companies are getting people coming and going and laughing all the way to the bank. Wonder if they get a pay raise from more money coming in by increasing payments?

IMHO, this change will help us indeed. See if I have $1000 balance on my credit card and I continue to pay only the minimum amount and avoid default anyway, it will take years to pay it completely, provided, I do not add more load on this debt. This will extract huge money from my pocket to pay the interests only. Moreover there is the risk of missing installments also.

But if I afford more per month then it will take less time to repay the debt and I can save some dimes. Don't you think it will help us truly?

Mom of twins, let them laugh now, remember it is the consumers who will have the last laugh :D

Mom of twins, has your credit card company also increased the minimum payments? Normally, this might be effective when people are making payments on their own. But when you have included the accounts in the consolidation program, the monthly payments have already been set and there should not be any alteration in the plan.

The reason for my question, Household Bank has been increasing payments since November. Started out with $23.00 and now they want $37.00 a month through consolidation. Household Bank is very hard to work with. After entering into consolidation, they turned my account over to an attorney. I had the last laugh because the attorney stated that beings its in consolidation and Household Bank was receiving money, he had no reason to pursue it.

Stanley,
You are right, we will have the last laugh.

Household is very hard to work with and it's amazing that they own so many cards. They turned us over the Accounts Receivable Management who is also a joke, we are in consolidation and they called me so I called them back and no one had a clue why they called. I called the extension back that left the message and the guy actually transferred me to someone else, what a joke! But then I actually got some really nice lady. Hey creditors if you call someone and they return your call, at least have a clue why you called them. I may be a loser because I didn't pay and went into consolidation but at least I know that.

I haven't received anything in the mail about increased minimum payments. Can credit card companies raise without consulting the customers. Although I've closed all my credit card accounts ... wonder if that makes a difference.

This is another facet of the Bankruptcy reform law which went into effect in October. the short answer is Credit Card companies, etc are required under Federal law to raise their minimum payment. Most card issuers have a minimum payment of around 2%. I believe under the law, the minimum is now set at 5 or 7%. This was done to help consumers actually pay off debt as opposed to paying the minimum and making no progress towards paying down the debt.In short, Yes, it is very legal.

I work for a credit card and the fdic is raising min payments. However, if you are on a program, be it a workout program or what I do(overlimit programs) your mins will be grandfathered. Also, I think you can opt out of the increase.

Eric C,

Thanks for the info. I was really very worried about it. Nice to hear the accounts consolidated already, are exempted from the new plan.

I think once I can mange to clear considerable amount of debt, I will then opt for the higher payments, which would help me become debt free faster. Thanks again.