|
Author: Charles Essmeier Article source: http://credit.freewarefiles.com/. Used with author's permission.
For years, major credit card companies have allowed cardholders to make minimum payments of 2% of the outstanding balances on their credit cards. Having customers pay the minimum doesn't reduce the balance by very much, but when the 18-30% interest rates that many credit cards charge is applied, the result is a profitable ones for the banks that issue credit cards. A balance of $1000 can take nine years to pay off at 20% interest if the borrower only pays the minimum due each month.
Clearly, it is not in the best interests of consumers to pay the minimum every month. But tens of thousands of Americans do just that, carrying huge balances and paying the minimum every month. The average household now carries $10,000 in credit card debt; for many people, paying the minimum is all they can manage. Due to changes in Federal law, several major credit card issuing banks will soon raise the minimum amount due to 4%. This might seem like a small increase, but if you are already deep in debt and paying the minimum amount, this could cause your payments to double. If you have a $10,000 balance and you are paying $200 per month, you will soon need to come up with $400 instead. Many people will find this impossible to do, as they are already paying as much as they can. What solutions are available?
The usual common sense rules of credit card use apply here. Stop using your credit cards. See if you can consolidate your debt on another credit card with lower interest. See if you can cut out some unnecessary expenses in order to free up some more money to pay your balance. Consider a home equity loan to consolidate your debt. Call your card issuing bank and see if they can work out repayment plan or lower your interest rate. There are numerous solutions available, but card holders need to be aware that the minimum payment is rising, and it isn't going to come back down. By charging a 4% minimum, the credit card issuing banks are hoping that consumers will pay off their debt a bit sooner and that fewer consumers will find themselves in a situation where filing for bankruptcy is the only solution. And once October comes around, even filing for bankruptcy will be more difficult. Credit card holders with large balances on their accounts should give considerable thought to reducing their debt now, as payment options and requirements are going to be more strict from now on. ©Copyright 2005 by Retro Marketing.
Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and StructuredSettlementHelp.com, a site devoted to information regarding structured settlements.
Creating a Feng Shui Power Office: 6 Easy Tips to More Successful Surroundings
Don't let your office stand in your way of success. Use feng shui to turn your cubicle, home office, or executive workspace from an anchor and into a launch pa...
Misconceptions About Weight Loss Surgery Cause Disappointment for Patients
As weight loss surgery becomes an increasingly popular treatment for morbid obesity misconceptions abound. Patients who undergo gastric bypass or gastric bandi...
Lesson #4: Six Powerful Places to Advertise Your Autoresponder!
Seven-lesson email course that will power up your email marketing and profits...
Ibanez SR400 Bass Guitar
The Ibanez SR400 bass guitar is very comfortable
to play. The neck is thin up at the headstock, you
can move your hand along it well because of the
Plastic Surgery Gone Wrong Not Just News
As with just about anything in life, there are many things that can go wrong with plastic surgery...
Free Online Advertising: Why You Should Use It
Free online advertising is very effective because of a few important reasons.
How to Get Credit Reporting Agencies to Help You
The process of clearing credit can be laborious and frustrating. Understanding your rights empowers you and saves you time and effort. By employing the followin...
Three Poems: Liberty, Death, and a Frog [with Commentary on Liberty]
A combination of three poems, all a little moody, but with a lot of internal guts...Rosa Penaloza
Affiliate Marketing
What is Affiliate Marketing? How can I use affiliate marketing to make me money?
Its Not Enough to Blog
Okay, so you are sold on the idea of the benefits of a weblog with regards to the search engine optimization of your website. But honey, you ain't seen nothin' ...
The Two Choices We Face
Each of us has two distinct choices to make about what we will do with our lives. The first choice we can make is to be less than we have the capacity to be. To...
Whose Voice is that Anyway?
Writers are always being told to find their voice. But what is voice? This article explains it simply.
YARROW TEA (Achillea Millefolium)
An amazing tea that can help with colds and flu, and also help you see in pure colour.
Play Ball To Get Fit
Chances are if you've stepped foot in a gym or watched a television fitness program in the past year then you've seen the "big balls". You've probably wondered ...
How to Keep your Brick Patio Weed Free
In researching this article, I found one instance where a homeowner was so incensed by the weeds in her patio that she set fire to them with a blowtorch! . This...
Life Insurance Providing Little Protection from Terrorism
Emergency services workers fear lack of insurance protection following London bombings.
Loans for Bad Debtors: Discarding Debt Disorganization to Recover Financial Growth
Some financial mistake can end up in you being termed as bad debtor. Loans for bad debtors are specifically catering to the demands of those who suffer from bad...
8 Tips To Building Your Dream Body
Just like routines, this document is not intended to be a "one size fits all." Take from it what you will, but please remember that what is most important is y...
Life Issues Pt. 3 - An Attitude of Gratitude
An Attitude of Gratitude. How important is this to you on your path to success? I sincerely believe that everyone should consider this simple but effective f...
What Credit Card is Best for Me?
Some information about different credit cards. Three cards is included in this article: Discover Platinum Card, Chase Cash Plus Rewards Visa and Chase Platinum ...
Bathroom Vanities – The Finishing Touch For Your Bathroom Makeover!
Bathroom vanities come in a wide variety of different styles and finishes, so it can be tricky to choose one that will be just right for your bathroom's new ima...
Verbal Self Defense – A Critical Factor in Self Defense for Women
Knowing verbal self defense, or the use of your voice in a threatening situation, is an extremely important and critical tool neccesary in protecting yourself.
Make All Your Mailing Lists Double Opt-In
Accusations of spam can be so harmful to your business that every effort should be made to prevent it. However, simply requesting a surfer to enter an e-mail a...
Is It Possible to Improve Your Health by Simply Drinking More Water?
To many people, this may seem a simplistic answer to a complex question: How can doing something so simple produce such noticable & quick results?
|
Print this page