|
|
|
|
|
|
|
Beware of Falling Minimum Payments
If you opened a credit card statement recently and were pleasantly surprised to find that your minimum payment due was lowered, don't be so quick to "jump for joy". What may appear as a small boost to your monthly budget is actually the rock that can weigh you down in debt for a lifetime.
More and more credit card companies are moving to requiring a minimum payment of 2% of your total outstanding balance. Consumer Action, a consumer advocacy group out of San Francisco, found that the number of card companies with a 2% minimum payment reached 53%, up from 43% just a year ago.
Some creditors have even gone so far as to call this a "consumer friendly" move claiming it will assist consumers faced with today's economic woes. In reality, a lower minimum payment causes you to take longer to pay off your debt to the creditor while winding up paying them more money in interest payments.
For example, let's say you have a credit card debt of $2500.00 @18% annual percentage rate (APR). Your monthly minimum payment based on a 2.5% pay back rate would be $62.50 per month. Oh and by the way, here's what the credit card company really doesn't want you to know - it will take you 20 YEARS to pay off your $2500.00 balance paying the minimum monthly due. And you will have paid the credit card company $3,365.51 in interest!
Now lets look at the same example using the rate of 2% minimum monthly payment. Your monthly payment drops to just $50.00 a month. You might be tempted to think "wow, I've got an extra $12.50 a month to play with, yippeee!". Not so fast! That lower minimum payment now means it will take you 34.5 YEARS to pay off your balance of $2500.00 and you'll wind up paying $6,430.93 in interest!
Consumer Action also reports that many credit card companies are imposing higher late payment fees and "more than a third of card issuers said they will raise existing cardholders' rates because of poor credit histories -- with other creditors -- even if the consumer has made regular, timely payments with that issuer".
My advice is to watch your use of credit carefully, always pay more than the minimum monthly due, and be sure to read the fine print on any credit card offers or changes to your existing accounts.
© 2004, www.yourfreecreditreportnow.com
Author: James H. Dimmitt
James is editor of "TO YOUR CREDIT", a weekly free newsletter. Subscribe to the newsletter by visiting http://www.yourfreecreditreportnow.com.
RTE.ie
TheStreet.com - 3 hours ago
Swiss banking giant UBSUBS announced Friday it likely will break even or report a small loss for the second quarter, thanks to a large tax credit. ...
Tax credit set to lift UBS into black guardian.co.uk
Helped by tax credit, UBS expects to beat analyst forecasts for ... International Herald Tribune
UBS avoid losses through £1.5bn tax credit Times Online
BBC News - AFPall 287 news articles
Javno.hr
Financial News, UK - 13 hours ago
According to the report: "credit rating information should support, not replace, investor due diligence; CRAs should enhance the information underlying ...
Builder Toll Bros. has its credit rating slashed The Star-Ledger - NJ.com
Louisiana's credit rating upgraded WDAM-TV
SEC’s effort to ease reliance on credit raters is limited by host ... FinancialWeek (subscription)
NTV - Wall Street Journal Blogsall 224 news articles
China Daily
Economist, UK - Jul 3, 2008
The bursting of credit and house-price bubbles in America bears out the analysis of William White, the BIS’s sadly retiring chief economist, ...
Loan week, June 27-July 3 FinanceAsia
Day the giants took a sound beating Scotsman
Marxists on the capitalist crisis 5: trevor evans -Imbalances in ... Workers' Liberty
Reuters - RTE.ieall 375 news articles
RTE.ie
guardian.co.uk, UK - 23 hours ago
Britain's consumers and businesses are gripped by an ever-tightening credit crunch as banks withdraw mortgage packages and tighten lending conditions, ...
Credit crisis: mortgage conditions set to get worse, says Bank of ... Telegraph.co.uk
Bank survey finds credit squeeze set to intensify Reuters UK
British credit conditions to get tighter, BOE survey finds MarketWatch
Mirror.co.uk - The Heraldall 174 news articles
AFP
AFP - 6 hours ago
PARIS (AFP) — Credit Mutuel of France has made a firm bid for the German retail banking activities of US giant Citigroup, which operates in Germany under ...
Commerzbank drops out Thomson Merger News (subscription)
* Banks broadly weaker on bearish Goldman note guardian.co.uk
Commerzbank Not Bidding For Citigroup German Operations -Sources CNNMoney.com
Bloombergall 24 news articles
Hartford Courant, United States - 15 hours ago
Cindy Lupica recently signed up every member of her family to participate in a class-action settlement with TransUnion Corp., one of the three major credit ...
Family Finances: 'Authorized user' one way to build credit history Pittsburgh Post Gazette
Credit scores hit hard when banks lower card borrowing limits Daily Record (subscription)
all 3 news articles
NEWS.com.au
Sydney Morning Herald, Australia - 19 hours ago
The agreement to make the federal government solely responsible for the regulation of all credit providers is a coup for consumers and business, ...
Deal on consumer credit The Age
Loans industry welcomes takeover plan NEWS.com.au
Consumer credit goes Federal Money Management
Broker News Australia - The Sheetall 34 news articles
San Francisco Chronicle, USA - 17 hours ago
... with the major indexes again posting losses as worries about rising oil prices and the fallout from the credit crisis dogged the market. ...
Reuters - 5 hours ago
By Linda Stern WASHINGTON(Reuters) - Credit scores and reports are important, and not just for home buyers. Folks standing in line July 11 to buy a new ...
Calgary Herald, Canada - 4 hours ago
CALGARY - First Calgary Savings and Credit Union, along with Envision Financial and Valley First Credit Union, both of British Columbia, said Friday they ...
Envision Financial and First Calgary Savings enter partnership ... Northern Sentinel
all 2 news articles
Wind Chimes and more... If you're a college student, you probably already have a... Read More Nearly 20 years ago I worked for a small consumer... Read More You've probably heard the term credit scoring. You may have... Read More When credit cards are used wisely they can be very... Read More Are Credit Card companies starting to feel the pinch? We... Read More There's only one way to discover the "health" of your... Read More There is almost nothing more troublesome than having too much... Read More Lenders are quite fussy about what they like to see... Read More If you intend to apply for a loan, you need... Read More In this week's article, I am going to offer some... Read More What is a balance transfer?A balance transfer can be explained... Read More Collection agencies are businesses that collect past-due bills and accounts... Read More Anywhere you go online nowadays, you will see a multitude... Read More A consumer credit report is a factual record of an... Read More One of the biggest problems people have in these modern... Read More Credit has become a much-used word, thanks to the various... Read More What FACTA means is that if you, as an individual,... Read More Getting an annual credit report review has been the advice... Read More Credit scores are the most important aspect that determines your... Read More This summary of the Fair Credit Reporting Act will explain... Read More Credit is currently and has been historically an integral component... Read More A credit score is most commonly known as a FICO... Read More If you have considered credit counseling as an option to... Read More Identity theft is when someone uses, without permission, your personal... Read More Spending HabitsSo you've just got your credit card. The first... Read More
Windchimes
for great gifts!
Student Credit Cards 101
Credit Traps Snag Consumers
Credit Scoring: What You Dont Know Can Hurt You
Low Interest Credit Cards Have Many Advantages
Are 0% Credit Cards Reaching Their End?
How Healthy Is Your Credit
How To Eliminate Credit Card Debt
The Things That UK Lenders Like to See on Your Credit File, (and? What They Don?t Like to See!)
Getting Your Credit Report and Understanding Whats On It
How to Order the Right Credit Reports to Repair Your Own Credit
All About Balance Transfers
Collection Agencies: What Do They Do?
Finding and Applying for the Right Credit Card Offer Online
Consumer Credit Reports
Credit Card Debt: One Way To Avoid It
A Cure for an Ailing Credit
I?ve Heard About FACTA; What Does It mean?
Annual Credit Report and Free Annual Credit Report
Credit Score: The Brightest Feather In Your Financial Cap
A Summary of the Fair Credit Reporting Act
Some Truth About Credit
What Is A FICO Score?
Choosing a Credit Counseling Company
Protect Yourself Against Identity Theft
Addressing Bad Credit Card Debt
Cutting Credit Card Costs
What are the APRs charged by the credit cards in... Read More
Are 0% Credit Cards Reaching Their End?
Are Credit Card companies starting to feel the pinch? We... Read More
Credit Cards - The Basics
How Lenders Operate ? And How They'll Make a Tidy... Read More
Simplifying Your Search For a New Credit Card
Today, selecting the proper credit card can be a bit... Read More
Understanding Your Credit Score
When you apply for credit one of the first things... Read More
Credit Card Dirty Tricks
There are many of us that have been badly stung... Read More
Credit Card Disclosure Table ? Do You Understand It All?
In addition to the APR (annual percentage rate) and the... Read More
Credit Repair: How To Deal With Your Creditors
If you are in danger of credit problems because you... Read More
Defeating Credit Card Debt With Self Control
Credit card debt is a major social problem in some... Read More
The Right Way To Credit Repair
If you have a bad credit rating, then you might... Read More
Maximizing Credit Card Rewards
In their quest to get you to sign up for... Read More
5 Ways To Raise Credit Score
It's not as hard as you think to raise credit... Read More
Lower Your Credit Card Interest Rate Now!
With today's credit card companies, there are many opportunities to... Read More
Credit Report ? Look Out for Your Debit Report, Too
Most consumers are aware that there are companies that keep... Read More
Like It Or Not, You Have A Score To Settle!
Like It Or Not, You Have A Score To Settle!... Read More
Rewards Cards: Are They Worth It?
Virtually all consumers will have a credit card at some... Read More
Student Credit Cards 101
If you're a college student, you probably already have a... Read More
Bankruptcy vs. Credit Counseling: What Should I Do?
Credit Counseling and bankruptcy are both ways to relieve the... Read More
Collection Agencies: What Do They Do?
Collection agencies are businesses that collect past-due bills and accounts... Read More
Identity Theft ? Monitor Your Credit Report
The recent security breach at credit card processor CardSystems Solutions... Read More
Give Yourself Credit
The Beginning of the Credit Card EraIn 1951, Diners Club... Read More
Stop Credit Card Offers
You can stop receiving credit card offers in the mail!... Read More
Bailiffs & Council Tax - Knowing What To Do
This article is about bailiffs who may call trying to... Read More
Why Your Credit Score is Important
Your credit score can either haunt you or reward you.... Read More
How to Evaluate and Raise Your Credit Score
Why do some people get offers for pre-approved credit cards... Read More
Credit |