How will this affect you? - Tilted Forum Project Discussion Community

Cynthetiq · 12-21-2005, 10:32 AM

Quote:

Banks raise credit card payments
By Kathy Chu, USA TODAY
In case you weren't spending enough this holiday season to buy gifts and heat your home, you may have to take another hit: higher credit card payments.
Nearly three years after regulators said minimum monthly payments should let you pay off debt in a "reasonable period of time," some banks are finally acting.

Most of the top 10 credit card issuers have raised their minimum payments this year. And in most cases, they've done so this quarter. (Story: Digging deeper to pay credit minimums)

Regulators urged banks to adjust their minimum payments by the end of 2005. The banks' delayed response to the guidelines issued in January 2003 means millions of people are being hit with higher credit card bills this holiday season.

The increase comes just as energy bills are soaring and a new bankruptcy law has made it harder to erase debt.

"It's quite simply disappointing that banks have waited and have not increased the minimum gradually but are doing it during the holidays," says Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

Banks say it takes time to update systems to accommodate the regulators' instructions. "These are not simple changes," says Alan Elias, a spokesman for Washington Mutual.

Still, "with a few exceptions, we expect them to be in compliance by year's end," says Barbara Grunkemeyer of the Office of the Comptroller of the Currency, one of the agencies that issued the guidelines.

Regulators didn't require minimum payments to rise by a fixed amount. But they said payments should cover fees and finance charges, plus 1% of principal. Until now, some minimums didn't even cover the interest owed, so debt would just keep growing.

Some card holders could see their minimum payment double, to 4% of the balance from 2%. On a $10,000 balance, the payment could jump to $400 from $200.

In the long run, the change is healthy for consumers: It means they'll pay off their credit cards more quickly. But at least at first, the higher payments could create financial hardship.

John Penn of the American Bankruptcy Institute expects more filings from low-income consumers who can't handle higher credit card payments. "If one of your bills doubled, it won't knock you out of the game immediately," Penn says. "You'll be late on some other bills, and you'll scramble, and it'll catch up to you eventually."

Yet it may not be feasible for some to declare bankruptcy.

"If (issuers) had done this a year ago, consumers who were underwater may have considered bankruptcy," but they may think twice about doing so after the stricter bankruptcy rules have taken effect, says Chi Chi Wu, staff attorney at the National Consumer Law Center.

It won't. I use a loyalty card for all my purchases and pay it off every single month.

Also our christmas funds are saved during the year, so there is a small amount of money set aside just for the Christmas budget.

I think that it is horrendous that people who are already "working poor" overstretched past their limits and just paying minimum payments now makes them even more "indentured servants."

G_Whiz · 12-21-2005, 10:37 AM

Actually this won't effect me.

On those credit accounts where we have a balance, we already pay more than double the minimum payment.

But this will be an issue for a lot of people who have grown used to running their credit to the limit.

frogza · 12-21-2005, 10:46 AM

Won't effect me at all. Our two cards are at 0. We only use them for emergencies.

Sultana · 12-21-2005, 10:50 AM

I just paid off one of my 2 card balances yesterday! And my other card balance is relatively small. I plan to apply the $ I used for the first balance towards the second, along with the reg. amount I already set aside for that (which is always significantly more than the minimum), I should be clear in no time (OK, a few months).

Then I should cast my eye on the hub's card.

So...it won't affect me in the least. But I think I have a much better handle on my credit use than many.

Charlatan · 12-21-2005, 10:55 AM

Until a month ago it would have effected me greatly.

I just managed to get my card down to zero and I paid off my wife's whopper of a card with our line of credit (prime plus one is much lower than the 19% or more she was paying on her card).

Suave · 12-21-2005, 10:55 AM

I pay my cc bill off monthly, so it won't affect me. Besides, there are better ways to borrow money than through your credit card.

snowy · 12-21-2005, 11:11 AM

I don't use credit cards. Right now, a credit card would just get SO and I into debt that we can't handle between our two skimpy incomes. It also won't affect my parents--they pay off their balance every month.

Ustwo · 12-21-2005, 11:39 AM

Its a catch 22 here.

First they sucker people into getting big balances with low monthy payments that will basicly never pay off the card.

Then the government comes along and says 'stop suckering people'.

So they finally do but the first group of suckers now has a much bigger monthy payment.

So either you keep having more people suckered into the credit card scam, OR you make them less attractive but screw those already scammed.

Perhaps the best solution would have been to grandfather those with big balances but no matter what its a lose/lose situation.

ShaniFaye · 12-21-2005, 11:50 AM

Wont affect me, I got rid of my credit cards 6 1/2 years ago and never looked back.

We pay cash for everything we buy

flamingdog · 12-21-2005, 11:53 AM

Fuck me, 10 grand on a credit card? I think I'd die.

Admittedly, I'm not sure if this applies to the UK, but with a balance of approx £300, I think I'll be okay.

Eweser · 12-21-2005, 12:53 PM

It won't affect me because I, too, pay double or more than the minimum amount. And it won't affect my parents, but my brother may have a hard time...

Elphaba · 12-21-2005, 01:29 PM

It is interesting that this follows closely behind the new bankruptcy law, which was a windfall for the credit card companies.

I pay off my cards each month (business and personal) so it doesn't effect me. It could be terribly difficult for those that have maxed out their cards and are just getting by. I think Ustwo raised a valid point in suggesting a grandfather clause. It might have been more equitable to have applied the new minimum payment schedule to new cards.

kutulu · 12-21-2005, 01:43 PM

Quote:

Originally Posted by Ustwo

Perhaps the best solution would have been to grandfather those with big balances but no matter what its a lose/lose situation.

I think grandfathering big balances (maybe 5k and up), as they are right now, would be a nice resolution.

The overall intent is solid and in the long run, people will be much better off. Cards will be paid off in less than half of the time and higher monthly payments may deter people from carrying large balances. However, in the short term this could really hurt a lot of people. There are MANY people out there with 10-20k in credit card bills.

Siege · 12-21-2005, 01:47 PM

Won't affect me at all. I barely use my credit card. I can't remember the last non-university book expense on my card.

laconic1 · 12-21-2005, 05:51 PM

No effect on me, but I have a pretty low credit limit on the one card I have, and have no intention of getting any others so I couldn't get too crazy with debt even if I wanted to.

xepherys · 12-22-2005, 07:32 AM

It'll only mean I pay a bit more each month. *shrug* Don't care much either way. I guess this'll be good for getting them paid off entirely.

Jinn · 12-22-2005, 07:55 AM

How the fuck do you get 10 grand on a credit card? I'd think at like 2 grand or if-all-else-fails 5 grand you should say "WTF I shouldn't be buying so much stupid shit.."

I've gotten maybe $800 on my cc at any given time, but its paid to $0 every month..

kutulu · 12-22-2005, 08:16 AM

Shit happens man. The timing belt on my car failed recently and I sure didn't have $4k lying around. Have a short hospital visit, lose your job for a couple months, etc. Sure lots of people with high debt got there because they spent it on shit but there are many people who just got into bad situations.

eribrav · 12-22-2005, 04:58 PM

First people whined that the companies were screwing people by letting them make low payments and sink further in debt.......now we've got whining that they raised the minimums. No matter what move the banks made, there would be somebody whining about it. When exactly did this nation devolve into a culture of incessant whining? I can't quite put my finger on it.

If you're deep in credit card debt, you've got a serious problem. Might as well start dealing with that problem sooner rather than later. Or perhaps we can say: You made your bed, now lie in it.

Marvelous Marv · 12-22-2005, 08:49 PM

Quote:

Originally Posted by Cynthetiq

I think that it is horrendous that people who are already "working poor" overstretched past their limits and just paying minimum payments now makes them even more "indentured servants."

I think it will FREE them. They will pay much less interest by paying down their balances. If they're not smart enough to have figured that out, this is one of the few new laws that will actually be of some benefit.

Sweetpea · 12-22-2005, 08:54 PM

well... i think it's good for people, and will help them managed their debt better? Either way, high minimums or low... debt is a difficult thing to get out of once you're in it ...

As for me, won't affect us at all, we only use our credit card to build credit and only charge what we can pay off immediately... we've never carried a balance except for once, which we paid off the following month... having a balance on a credit card would freak me out... having a mortgage to pay off makes me nervous enough

sweetpea

Redlemon · 12-23-2005, 06:50 AM

Quote:

Originally Posted by Elphaba

It is interesting that this follows closely behind the new bankruptcy law, which was a windfall for the credit card companies.

Exactly.

I'm also (presently) unaffected. I only use the credit card so that I don't have to hit the ATM as often, and for online purchaces: the money I'm spending is already in my bank account. I only hope a catastrophic illness doesn't drive me into credit card debt.

redsfan11 · 12-23-2005, 09:27 AM

Pay in full every month.

Scorps · 12-24-2005, 05:14 PM

Mine went up a little, but Canadian banks may be different!

RallyEX · 12-24-2005, 05:51 PM

Will have no affect here, wife and I paid everything off over the last few years... closed the accounts and cut up the cards. We keep a pretty decent nest egg for emergencies, and I carry a corporate cc for work. Otherwise, we pay cash. If we can't afford it, we don't buy it (with automobiles being the exception).

Rodney · 12-25-2005, 07:55 AM

We just have debit cards, and an Amex charge (not credit) card for big purchases.

It's good to be debt-free and feel virtuous about it, but I understand that this kind of "virtue" isn't always possible to people with limited income and a sudden huge financial problem -- medical bills, expensive repairs for a vitally-needed car, food and lodging after a job loss when there the money's run out and all that's left is that shiny plastic card...

How has society gotten so grim without us realizing it? In the old days, a desperate family would resort to a criminal loanshark, who charged exorbitantly high interest that could never be paid off, would eventually seize everything you owned, and could and would break the legs of those who couldn't pay?

Aside from the physical leg-breaking, how are things different now? Except that the loansharks are now publically-traded companies? And some of the biggest investment firms on Wall Street now invest in offshore Internet casinos (whose operation in this company is technically illegal) whose losers pay off with -- you guessed it -- credit cards.

genuinegirly · 12-25-2005, 09:36 AM

Shouldn't affect me much. I do have a credit card, but I always pay more than the minimum payment.

alansmithee · 12-25-2005, 03:09 PM

Doesn't affect me. The few times I actually carry a balance, I always pay well over the minimum (usually half of the total). But usually, I just try to pay it all off.

Beccarain · 12-28-2005, 05:29 PM

Quote:

Originally Posted by eribrav

First people whined that the companies were screwing people by letting them make low payments and sink further in debt.......now we've got whining that they raised the minimums. No matter what move the banks made, there would be somebody whining about it. When exactly did this nation devolve into a culture of incessant whining? I can't quite put my finger on it.

If you're deep in credit card debt, you've got a serious problem. Might as well start dealing with that problem sooner rather than later. Or perhaps we can say: You made your bed, now lie in it.

I'm in total agreement here. I've had credit cards for several years and have always managed them wisely . . . I pay them off right away.

I think a lot of people out there use credit cards because they DON'T have the money to pay for something. HUGE MISTAKE. Of course emergencies arise, like a huge car repair bill, the fridge conks out, whatever. But people need to discipline themselves to set money aside for emergencies (called SAVING MONEY).

I use 'em because they're more convenient for me; my platinum visa gives me an extended warranty on purchases, plus I earn cash rebate at end of year. I pay it off every month.

12-21-2005, 10:37 AM	#2 (permalink)
G_Whiz Junkie Location: Northern California	Actually this won't effect me. On those credit accounts where we have a balance, we already pay more than double the minimum payment. But this will be an issue for a lot of people who have grown used to running their credit to the limit. __________________ If love is blind, why is lingerie so popular?

12-21-2005, 10:50 AM	#4 (permalink)
Sultana Falling Angel Location: L.A. L.A. land	I just paid off one of my 2 card balances yesterday! And my other card balance is relatively small. I plan to apply the $ I used for the first balance towards the second, along with the reg. amount I already set aside for that (which is always significantly more than the minimum), I should be clear in no time (OK, a few months). Then I should cast my eye on the hub's card. So...it won't affect me in the least. But I think I have a much better handle on my credit use than many. __________________ "Love is a snowmobile racing across the tundra and then suddenly it flips over, pinning you underneath. At night, the ice weasels come." - Matt Groening My goal? To fulfill my potential.

12-21-2005, 10:55 AM	#5 (permalink)
Charlatan Getting it. Super Moderator Location: Lion City	Until a month ago it would have effected me greatly. I just managed to get my card down to zero and I paid off my wife's whopper of a card with our line of credit (prime plus one is much lower than the 19% or more she was paying on her card). __________________ "My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars." - Old Man Luedecke

12-21-2005, 10:55 AM	#6 (permalink)
Suave Twitterpated Location: My own little world (also Canada)	I pay my cc bill off monthly, so it won't affect me. Besides, there are better ways to borrow money than through your credit card. __________________ "Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are even incapable of forming such opinions." - Albert Einstein "Wise men talk because they have something to say; fools, because they have to say something." - Plato

12-21-2005, 11:11 AM	#7 (permalink)
snowy Kick Ass Kunoichi Location: Oregon	I don't use credit cards. Right now, a credit card would just get SO and I into debt that we can't handle between our two skimpy incomes. It also won't affect my parents--they pay off their balance every month. __________________ If I am not better, at least I am different. --Jean-Jacques Rousseau

12-21-2005, 10:46 AM	#3 (permalink)
frogza Registered User Location: Right Here	Won't effect me at all. Our two cards are at 0. We only use them for emergencies.

12-21-2005, 11:39 AM	#8 (permalink)
Ustwo Pissing in the cornflakes	Its a catch 22 here. First they sucker people into getting big balances with low monthy payments that will basicly never pay off the card. Then the government comes along and says 'stop suckering people'. So they finally do but the first group of suckers now has a much bigger monthy payment. So either you keep having more people suckered into the credit card scam, OR you make them less attractive but screw those already scammed. Perhaps the best solution would have been to grandfather those with big balances but no matter what its a lose/lose situation. __________________ Agents of the enemies who hold office in our own government, who attempt to eliminate our "freedoms" and our "right to know" are posting among us, I fear.....on this very forum. - host Obama - Know a Man by the friends he keeps.

12-21-2005, 11:50 AM	#9 (permalink)
ShaniFaye Submit to me, you know you want to Location: Lilburn, Ga	Wont affect me, I got rid of my credit cards 6 1/2 years ago and never looked back. We pay cash for everything we buy __________________ *I want the diabetic plan that comes with rollover carbs. I dont like the unused one expiring at midnite!!*

12-21-2005, 11:53 AM	#10 (permalink)
flamingdog Still fighting it.	Fuck me, 10 grand on a credit card? I think I'd die. Admittedly, I'm not sure if this applies to the UK, but with a balance of approx £300, I think I'll be okay.

12-21-2005, 12:53 PM	#11 (permalink)
Eweser Psycho Location: O-K-L-A-H-O-M-A	It won't affect me because I, too, pay double or more than the minimum amount. And it won't affect my parents, but my brother may have a hard time... __________________ "Whoever wrote this episode should die!"

12-21-2005, 01:29 PM	#12 (permalink)
Elphaba Deja Moo Location: Olympic Peninsula, WA	It is interesting that this follows closely behind the new bankruptcy law, which was a windfall for the credit card companies. I pay off my cards each month (business and personal) so it doesn't effect me. It could be terribly difficult for those that have maxed out their cards and are just getting by. I think Ustwo raised a valid point in suggesting a grandfather clause. It might have been more equitable to have applied the new minimum payment schedule to new cards.

12-21-2005, 01:47 PM	#14 (permalink)
Siege is a tiger Location: Toronto, Ontario, Canada	Won't affect me at all. I barely use my credit card. I can't remember the last non-university book expense on my card. __________________ "Your name's Geek? Do you know the origin of the term? A geek is someone who bites the heads off chickens at a circus. I would never let you suck my dick with a name like Geek" --Kevin Smith This part just makes my posts easier to find

12-21-2005, 05:51 PM	#15 (permalink)
laconic1 Junkie	No effect on me, but I have a pretty low credit limit on the one card I have, and have no intention of getting any others so I couldn't get too crazy with debt even if I wanted to.

12-22-2005, 07:32 AM	#16 (permalink)
xepherys <3 TFP Location: 17TLH2445607250	It'll only mean I pay a bit more each month. shrug Don't care much either way. I guess this'll be good for getting them paid off entirely.

12-22-2005, 07:55 AM	#17 (permalink)
Jinn Lover - Protector - Teacher Location: Seattle, WA	How the fuck do you get 10 grand on a credit card? I'd think at like 2 grand or if-all-else-fails 5 grand you should say "WTF I shouldn't be buying so much stupid shit.." I've gotten maybe $800 on my cc at any given time, but its paid to $0 every month.. __________________ "I'm typing on a computer of science, which is being sent by science wires to a little science server where you can access it. I'm not typing on a computer of philosophy or religion or whatever other thing you think can be used to understand the universe because they're a poor substitute in the role of understanding the universe which exists independent from ourselves." - Willravel

12-23-2005, 09:27 AM	#23 (permalink)
redsfan11 Upright	Pay in full every month.

12-22-2005, 08:16 AM	#18 (permalink)
kutulu Junkie	Shit happens man. The timing belt on my car failed recently and I sure didn't have $4k lying around. Have a short hospital visit, lose your job for a couple months, etc. Sure lots of people with high debt got there because they spent it on shit but there are many people who just got into bad situations.

12-22-2005, 04:58 PM	#19 (permalink)
eribrav Junkie Location: upstate NY	First people whined that the companies were screwing people by letting them make low payments and sink further in debt.......now we've got whining that they raised the minimums. No matter what move the banks made, there would be somebody whining about it. When exactly did this nation devolve into a culture of incessant whining? I can't quite put my finger on it. If you're deep in credit card debt, you've got a serious problem. Might as well start dealing with that problem sooner rather than later. Or perhaps we can say: You made your bed, now lie in it.

12-22-2005, 08:54 PM	#21 (permalink)
Sweetpea Fade out Location: in love	well... i think it's good for people, and will help them managed their debt better? Either way, high minimums or low... debt is a difficult thing to get out of once you're in it ... As for me, won't affect us at all, we only use our credit card to build credit and only charge what we can pay off immediately... we've never carried a balance except for once, which we paid off the following month... having a balance on a credit card would freak me out... having a mortgage to pay off makes me nervous enough sweetpea __________________ Having a Pet Will Change Your Life! Looking for a great pet?! Click Here! "I am the Type of Person Who Can Get Away With A lot, Simply Because I Don't Ask Permission for the Privilege of Being Myself" Last edited by sweetpea; 12-22-2005 at 08:56 PM..

12-24-2005, 05:14 PM	#24 (permalink)
Scorps Lost!! Location: Kingston, Ontario	Mine went up a little, but Canadian banks may be different!

12-24-2005, 05:51 PM	#25 (permalink)
RallyEX Tilted Location: Southeast Ohio	Will have no affect here, wife and I paid everything off over the last few years... closed the accounts and cut up the cards. We keep a pretty decent nest egg for emergencies, and I carry a corporate cc for work. Otherwise, we pay cash. If we can't afford it, we don't buy it (with automobiles being the exception). __________________ Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime. - Mark Twain

12-25-2005, 07:55 AM	#26 (permalink)
Rodney Observant Ruminant Location: Rich Wannabe Hippie Town	We just have debit cards, and an Amex charge (not credit) card for big purchases. It's good to be debt-free and feel virtuous about it, but I understand that this kind of "virtue" isn't always possible to people with limited income and a sudden huge financial problem -- medical bills, expensive repairs for a vitally-needed car, food and lodging after a job loss when there the money's run out and all that's left is that shiny plastic card... How has society gotten so grim without us realizing it? In the old days, a desperate family would resort to a criminal loanshark, who charged exorbitantly high interest that could never be paid off, would eventually seize everything you owned, and could and would break the legs of those who couldn't pay? Aside from the physical leg-breaking, how are things different now? Except that the loansharks are now publically-traded companies? And some of the biggest investment firms on Wall Street now invest in offshore Internet casinos (whose operation in this company is technically illegal) whose losers pay off with -- you guessed it -- credit cards.

12-25-2005, 09:36 AM	#27 (permalink)
genuinegirly Eat your vegetables Super Moderator Location: Arabidopsis-ville	Shouldn't affect me much. I do have a credit card, but I always pay more than the minimum payment. __________________ "Sometimes I have to remember that things are brought to me for a reason, either for my own lessons or for the benefit of others." Cynthetiq "violence is no more or less real than non-violence." roachboy

12-25-2005, 03:09 PM	#28 (permalink)
alansmithee Junkie	Doesn't affect me. The few times I actually carry a balance, I always pay well over the minimum (usually half of the total). But usually, I just try to pay it all off.