Beware,Falling,Minimum,Payment DIY Beware Of Falling Minimum Payments
When starting a new work at home business it is very easy to become consumed by it. We spend so much time trying to get the business up and running that we may end up becoming burned out and lose our motivation. There is so much to learn and Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-parent:"";mso-padding-alt:0in
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 todays 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, lets 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, heres what the credit card company really doesnt 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, Ive 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 youll 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.
Beware,Falling,Minimum,Payment