Chase increasing minimum payment percentage

**littleplum** · 07-07-2009, 01:36 PM

Originally Posted by walker24

Has anyone else gotten the notice from Chase they are increasing the minimum payment from 2% to 5%? I read on MSN it seems to be targeted toward customers that took advantage of low interest rate balance transfers. I cannot imagine how this will affect some people. At least we will have the balance paid off sooner....

Chase is doing this across the board, as are other card companies. You can thank Congress and banking regulators for this change. The credit card companies would have been fine with collecting just 1-2% of your balance for pretty much forever, as you rack up the interest.

However, this has been going on for quite a while. Here's a story from 2 1/2 years ago that details why this is happening:

http://www.cbsnews.com/stories/2006/...n1184663.shtml

Let's say your balance is $10,000 (not far off the average balance of $9,300) and your interest rate is 13 percent.

If your minimum payment is 2 percent of the total balance, minimum payment is $200 a month. At that rate, you would pay off the debt in 33 years and total interest paid would be $11,450.

If your minimum payment doubles to 4 percent of the total balance, minimum payment is $400 a month. At that rate, you would pay off the debt in about 13 years and total interest paid would be $3,664. The end result is that you would pay off your debt 20 years earlier, and save more than $7,700 in interest.

**Dancing Lotus** · 07-07-2009, 03:14 PM

I am so glad I do not have any credit cards

**CrazyCat** · 07-07-2009, 03:35 PM

I've heard rumblings that this was going to happen. I say it's about time.~We are in this mess because people charge without the thought of HOW LONG it will take to pay something off.

33 years~Holy **it.....that's a MORTGAGE!

I had a wake up call many many years ago...when I owed around $3000.00 to Chase. Making the minimum payment...I calculated it out that it would have taken over 10 years to pay it off~so I took out a personal loan and paid them off. Now.... I owed on this personal loan for about 4 years...but it beat the HECK out of 10 years...and I learned my lesson. The only charge I've ever done since...(besides the house mortg. & vehicles) is 0 percent. We bought our lawn mower 12 months same as cash. That's the ONLY kind of credit we allow ourselves. Now we have toys...(4 wheelers, snowmobiles, camper)~but we buy used..and pay cash.