Credit Cards to Double Monthly Bill Amounts

[Mary in KC]

I just read this. Since the passing of the Bankruptcy Bill Bank of America and Wachovia are doubling the amount due each month from 2% to 4%.

If people have a large balance due that could be a huge difference due each month.

[bryant69]

1. Where did you read it?

Seems like that would be hard to pull off.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[Mary in KC]

7. Shreveport Times has the article

I saw it over on Raw Story

[trogdor]

16. Not.

They could do it tomorrow. All they have to do is send out a flyer to their cardholders informing them of the change. That's it. No permission required. If you can't pay $600/mo., too bad.

[amber dog democrat]

2. Thankfully we treat credit cards as if they were heroin.

no more than we need, and NEVER carry a balance.
Now that they have taken the gloves off one can see them for the adversarial opportunists that they are. I ought to cancel all of the ones I don't use.
not suprised at this at all.

[ret5hd]

6. so, ummm, uhhh...

how much heroin DO you need?

just askin'.

[amber dog democrat]

15. That would be telling

wouldnt it ? :)

[Harlequin]

10. That's hysterical. No more so-called "heroin" than we need...

[TayTay]

3. Are you sure?

This would actually enable people to pay off their credit card bills faster. People would be paying more towards principle and would be accumulating less month-to-month finance charges. (Because principle would be going down.)

Usually credit cards want you to pay less each month, because your debt goes up, finance charges accrue and the credit card companies make more money.

[suziedemocrat]

9. Yes - but if people have a current budget for a 2% payment -

they may not be able to afford the 4% payment. That would mean late fees, and an excuse to raise the interest rate to 25% or more.

This would be good if they had required a 4% minimum payment from the start - but for some people these new 4% payments will be hard to work into their current budgets.

[TwilightZone]

4. In one way, this could be a good thing.

I realize that many won't be able to afford the payment difference, but paying the higher payment will cut the repayment term length and total interest paid substantially.

[AllegroRondo]

5. Mixed blessing

raising the minimum amount due also shortens the time it will take to pay off the balance. At 2%, it can take 30 years to pay off a $5,000 balance.

[Mary in KC]

8. I worked for years getting mortgages approved and

you would not believe how many people have many credit cards and all are charged right up to the limit. If all of those payments were to double they would be in a world of hurt.

[liam_laddie]

11. CC industry

One possible scenario is that the financial industry sees a
coming recession, depression, collapse - pick your poison -
and is squeezing cash from us ASAP. A bit cynical perhaps,
but in this climate, it's easy to tie in the bankruptcy bill, this
CC policy revision, rising interest rates, ad nauseum.

[mcscajun]

12. It'll certainly hurt people with outstanding balances,

but it will make folks just now thinking of taking on that debt think a bit differently.

Too many people only consider their ability to make the minimum payments when they take on new debt; this is where most of the problems start.

I've said this in many of the threads started about this story, and I'll say it again: it may not be a popular outcome, but it is one of the few responsible things the lenders have done. It's been one of the changes that people wanting to eliminate predatory lending practices have been asking for. Making minimum payments only (under most credit card agreements) amounts to paying over 30 years for a sweater or a CD. Insane.

[Harlequin]

13. Credit card companies: Writing on the wall?

As if their analysis says consumers will be running out of income, and therefore they're laying all this groundwork to a) get more money faster, and b) prevent bankruptcy. What are they going to make us do if we can't pay back... join the army?

HOLY SHIT.

[KharmaTrain]

18. Squeezing A Little Harder And A Little Harder

The game here is not to bankrupt you or to stop you from buying...it's to lure you into their system and then lock you in...slowly squeezing as not to rile the masses, but enough that they make more and you just pay. It's happened every time there are changes to these type of rates and trying to fight this is futile.

Also, the new laws enable one creditor's rating to affect another. For example, if you miss a payment on a retail store card...even if it's small, that can be reported across the credit world and have an affect on your mortgage or other loans. Again, a squeeze they can put on once you're trapped into their game.

Frontline did an excellent program on this topic recently and showed the gimicks the major card companies use to deceive people into getting and using cards, and the many, very legal, ways they can put people into indentured servitude if you dare miss a payment.

As long as people don't howl and elect politicians who protect these games, they'll go on.

[elehhhhna]

14. They want bad risks to switch their balances to lower-minimum

cards. That way the'll at least recoup their outlay. They know there are lots of bankruptcies coming next quarter. Like a years worth. Like a million people.

[Media_Lies_Daily]

17. If true, there will be quite a few people rushing to declare Chapter 7....

...before the Bankruptcy Bill gets signed by Herr Busch. This will add an additional incentive to declare quickly.

[earth mom]

19. The bankruptcies are coming...

and the CC companies are gonna get a good chunk of their money BEFORE that happens no doubt! They also intend to shake loose the "deadbeats" aka as "unfortunate souls who've lost jobs or had traumatic illnesses and couldn't work" and cut em off for being unable to pay what amounts to double payments every month. :grr:

CC companies are despicable blood sucking parasites plain and simple. :puke:

[UdoKier]

20. That is a good thing.

There may be some initial shock to the cardholder, but it would force them to pay off their balances quicker, and thus pay significantly less interest over the live of the balance.

Many of these cards have minimum payments that barely cover the interest, which means the borrower is perpetually paying interest on a balance that never goes down.

I'm actually surprised to hear there is something good in this legislation.