Many credit card companies are increasing the monthly minimum payment due, which will reduce length of time to pay off debt but may increase amount of late payments.
July 5, 2005 (Press Release) --
June 30, 2005— The increase in the minimum monthly payment going into effect on some credit cards will reduce the amount of time is takes a person to pay off his or her debt.
Many credit card companies, including Bank of America, Citigroup, Discover & MBNA, are now increasing the amount due from 2 percent of a the card’s balance to 4 percent.
This change comes from pressure on the credit card companies from federal regulators to show how long it will take to pay off the balance by just paying the minimum payment.
“The good news is consumers are cutting a decade or more off the repayment of the debt,” said Charlie Fetscher, COO of Credit Card Management Services, Inc. “The bad news is consumers who are barely able to make the minimum payment cannot afford the increase.”
The increase in amount due will help consumers to decrease the time it takes them to pay off their debt but with a balance of $10,000 a consumer’s payment will increase from $200 to $400.
Consumers’ alternatives are bankruptcy, tapping the equity in their house again, slashing spending in other areas or joining a debt management program and resolving the problem permanently.
“Consumer credit counseling now becomes even more valuable by keeping the minimum payment low while also applying more of the payment to principle,” Fetscher said. “This is a clear win for the consumer.”
Credit Card Management Services, Inc. is a non-profit credit counseling and education agency in West Palm Beach. For more information please call 1-800-920-2262 or visit www.debthelper.com.
Many credit card companies, including Bank of America, Citigroup, Discover & MBNA, are now increasing the amount due from 2 percent of a the card’s balance to 4 percent.
This change comes from pressure on the credit card companies from federal regulators to show how long it will take to pay off the balance by just paying the minimum payment.
“The good news is consumers are cutting a decade or more off the repayment of the debt,” said Charlie Fetscher, COO of Credit Card Management Services, Inc. “The bad news is consumers who are barely able to make the minimum payment cannot afford the increase.”
The increase in amount due will help consumers to decrease the time it takes them to pay off their debt but with a balance of $10,000 a consumer’s payment will increase from $200 to $400.
Consumers’ alternatives are bankruptcy, tapping the equity in their house again, slashing spending in other areas or joining a debt management program and resolving the problem permanently.
“Consumer credit counseling now becomes even more valuable by keeping the minimum payment low while also applying more of the payment to principle,” Fetscher said. “This is a clear win for the consumer.”
Credit Card Management Services, Inc. is a non-profit credit counseling and education agency in West Palm Beach. For more information please call 1-800-920-2262 or visit www.debthelper.com.
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