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.
![]() Google News Updated : Thu, 24 Jul 2008 00:51:42 GMT "Dark Knight" beats total of previous Batman film - Reuters
Reuters - By Dean Goodman LOS ANGELES (Reuters) - After just six days of release in North America, the new Batman sequel "The Dark Knight" has grossed more domestically than its predecessor did in its entire run, distributor Warner Bros. Video: 'Dark Knight' Sets Weekend Box Office Record 'Dark Knight' may be summer's highest-grossing film Publ.Date : Wed, 23 Jul 2008 23:19:56 GMT US House Approves Fannie-Freddie Bill by 272-152 (Update1) - Bloomberg
Bloomberg - By Brian Faler July 23 (Bloomberg) -- The US House of Representatives approved legislation designed to shore up confidence in Fannie Mae and Freddie Mac and stem the record surge in mortgage foreclosures, sending the bill to the Senate. Video: House OKs Rescue for Homeowners, Freddie, Fannie US mortgages: Bush relents on veto threat to Fannie and Freddie ... Publ.Date : Wed, 23 Jul 2008 23:37:49 GMT Microsoft refunding gamers, Games for Windows Live goes free - Ars Technica
Ars Technica - By Frank Caron | Published: July 23, 2008 - 07:06PM CT PC gaming wasn't a huge factor at this year's E3, but it seems that Microsoft was merely biding its time before making its big moves to try and perk up the waning PC gaming market. Microsoft Drops Player Fees On Games For Windows Live Unangst: GFW Live Has Full Game Download Plans 'On The Roadmap' Publ.Date : Thu, 24 Jul 2008 00:17:11 GMT "Bad Girls" mind-set, Pierson and Parker a volatile mix - WNBA - ESPN ESPN - By Mechelle Voepel What does it take to light up a tinderbox? Just a spark. Or in the case of the Detroit-Los Angeles scuffle with 4.6 seconds left of a WNBA game Tuesday, it was a Spark. WNBA reviewing fight between Detroit, LA players Don't make Mahorn the bad boy in WNBA scuffle Publ.Date : Wed, 23 Jul 2008 23:15:40 GMT Google unfurls less laughable Wikipedia - Register
Register - By Cade Metz in San Francisco → More by this author Back in December, the search engine cum world power announced an anyone-can-edit online encyclopedia it insists on calling Knol, and this morning, with a post to The Official Google Blog, ... Google Launches Knol, The Monetizable Wikipedia Google opens Knol website, a wiki with bylines Publ.Date : Wed, 23 Jul 2008 23:46:16 GMT Angels' bats loom large in victory over Indians - Los Angeles Times
Los Angeles Times - Normally tepid offense produces season highs in runs and hits (19). Jeff Mathis, Howie Kendrick and Casey Kotchman combine for 13 hits, Francisco Rodriguez gets 42nd save and team ups West lead to 10 By Bill Shaikin, Los Angeles Times Staff Writer The ... Mathis drives in six; Angels hold off Tribe in wild slugfest Angels pound Laffey, slam Mastny, in ripping Indians, 14-11 Publ.Date : Thu, 24 Jul 2008 00:05:36 GMT Genetic Cause of Statin-Related Muscle Pain Found - Washington Post
Washington Post - By Ed Edelson WEDNESDAY, July 23 (HealthDay News) -- British researchers have discovered a genetic variant that causes some people who take cholesterol-lowering statins to have the muscle weakness called myopathy. 7 Reasons Not to Dismiss Statin-Caused Pain Discovery may boost statin safety Publ.Date : Wed, 23 Jul 2008 21:59:27 GMT Amazon Associate Store |
PARLOT::Ebooks, Scripts,
Websites, and more... Your credit file may not reflect all your credit accounts.... Read More Anywhere you go online nowadays, you will see a multitude... Read More Today, selecting the proper credit card can be a bit... Read More Some credit cards offer a cash advance option. But how... Read More Clean Credit Reports, your credit report contains information about where... Read More Most consumers are aware that there are companies that keep... Read More The Federal Trade Commission (FTC) has set up a new... Read More In the high tech world of today, credit card fraud... Read More Online credit reports are easily accessible to those interested in... Read More Even if you think you have a wonderful credit report,... Read More Credit cards represent an important part of our financial lives.... Read More His hard earned money? Gone. Creditors on his back everyday.... Read More Step I - Selecting A Collection AgencySelecting a credit collection... Read More When you buy real estate, lenders run all of the... Read More With so many low interest credit cards on offer, how... Read More Building a good credit history is important. If you have... Read More There are many evils associated with credit cards, but there... Read More The most important thing for you to remember is that... Read More Do you know why you should check your credit report?Of... Read More Credit 101How does a creditor determine whether to grant you... Read More As you probably know, interest rates are at all time... Read More Credit Cards can bankrupt you if you let them run... Read More A good credit reward card can contribute to your retirement... Read More Credit needed for real estate mortgage financing differs from credit... Read More Credit card debt is a major social problem in some... Read More
Adsense
websites
Can You Acquire Good Credit Overnight? You Bet
Finding and Applying for the Right Credit Card Offer Online
Simplifying Your Search For a New Credit Card
How To Save Money On Credit Cards
Clean Credit Report: Easily Raise Your Credit Score 100 points
Credit Report ? Look Out for Your Debit Report, Too
Free Credit Reports Now Available From the FTC
How To Protect Yourself Against Credit Card Fraud
Online Credit Report and Online Credit Reports
Improving Your Credit Report
Choosing The Credit Card That Is Right For You
Identity Theft : They Got Him
Dealing With A Collection Agency
Credit Help for Real Estate Financing: Credit Scores
Choosing the Best Low Interest Credit Card
How To Establish Great Credit
The Advantages of Credit Cards
Good Credit Is Not A Good Reason To Borrow More Money After Youve Achieved Financial Freedom
Do you Know the Benefits of Checking your Credit Report?
How Does a Creditor Determine Whether to Grant You Credit?
Credit Card Balance Transfers Can Help You Stop Putting Money Down The Drain
5 Things Your Credit Card Company Keeps Quiet About
Reward Credit Cards: Get the Best Rewards Card Incentive Program
New Credit Advice: Dont Pay off Those Credit Cards!
Defeating Credit Card Debt With Self Control
The three major credit bureaus, Experian, Equifax and Trans Union... Read More
When I received my first credit card in the mail... Read More
Your credit score can either haunt you or reward you.... Read More
A credit report is more than just a snapshot of... Read More
If you have been shopping around for a Low Interest... Read More
Do you have enormous credit card debt? You are certainly... Read More
Have you ever wondered why your credit card bill is... Read More
We've all seen the ads on television or in magazines,... Read More
Joint debts remain joint debts.Both spouses signed a legally binding... Read More
Bank robbery has grown to become a huge problem in... Read More
Credit card consolidation is a popular solution for those with... Read More
How to Repair a Bad Credit Rating?The Right Way!If you... Read More
We have all heard countless stories of people over their... Read More
It's not as hard as you think to raise credit... Read More
What do a shoe retailer, an online discount broker, and... Read More
Commercial collections: fixture of the new B2B cultureIf you're in... Read More
Do you know what your credit card is truly costing... Read More
It may seem like a simple question but its important... Read More
1. Choosing A new credit cardThere are many reasons for... Read More
So you got into debt, had problems but you got... Read More
Even if you have heard of a credit report, you... Read More
Are Credit Card companies starting to feel the pinch? We... Read More
One of the focus areas of my information is the... Read More
The average American knows very little about bankruptcy. Most people... Read More
As identity theft becomes more prevalent, the need to regularly... Read More
Credit |