Some Credit Card Companies Are Increasing The Minimum Monthly Payment
January 7, 2012
You probably heard about the current changes Chase made regarding its 3% increase in their monthly minimum payment for certain credit cardholders. While you might not own a Chase credit card that does not mean it cant affect you soon. More credit card issuers could follow suit. Unfortunately, the only way to avoid the increase it by either paying off your balance and keeping it paid off each month or switching credit card companies. If you don’t have that luxury here are some things to help combat the increase if your card issuer increases your minimum payment.
Stop making buys on the credit card.
The last thing you need is to create a higher balance on a credit card whose minimum payment has just gone up. Put the credit card away and avoid using it until you’ve paid your balance off. After that make small, inexpensive charges on the credit card and pay the balance in full each month.
Pay the entire balance off
If you’re currently working to pay off your credit card balance, you’re probably making payments that are higher than the minimum monthly payments. Since your minimum payment is a percent of your credit card balance, reducing your balance will lower your minimum payment. The only real way to avoid credit card changes like minimum payment increases is getting rid of your credit card debt absolutely.
Transfer to another credit card.
If you simply can’t afford the increased minimum payment, consider moving the balance to a credit card with a lower, more inexpensive minimum payment. You might end up with a higher interest rate on the new credit card, so make sure you’ll still be able to afford the payment.
Shuffle around your payments from other debts.
If you’re in the process of paying off your debts, you’re probably sending higher credit card payments to one or more of your other credit cards or loans. In that case, you can lower payments on your other debts to get more money for the increased minimum payment.
Cut your expenses.
There are some cases where the credit card minimum payment increases by $300 or more. If this is the case, you might find yourself unable to pay the extra $300 a month. Now is the time to take a look at your household budget and cut back on some expenses. Some areas you can cut back on are cable TV, cell phone and eating out. Look at where you spend the most money each month to see where you should cut back.
Get some consumer credit counseling.
You might be able to reduce your minimum payment by enrolling in consumer credit counseling. Credit counselors work with your creditors to lower your minimum payments and often your interest rates as well. There are some creditors that try to use credit counseling as a means to increase your interest rate so be wary of this. Unfortunately, if you’ve no other alternative you might have to accept a higher interest rate in exchange for a lower minimum payment.
Use a home equity loan to pay the balance.
Using your home’s equity to pay off debt is risky. That’s because you’re using your home as security for your credit card debt. If you fall behind on your credit card payments, your credit gets tarnished. On the other hand, defaulting on a home equity loan puts you at risk of foreclosure and hurts your credit. Nevertheless, a home equity loan is an option you should carefully think about and take at your own risk.
Complain to the FTC
The Federal Trade Commission, FTC, is a government agency that protect consumers from unfair business practices, including credit card companies. Often, when the FTC receives enough complaints about a particular company, the bureau orders that company to end the practice and might even require the company to refund money back to consumers.How to Contact the FTC
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