When a credit card company with which you have a card sends a letter in a thin envelope, it’s best to read it. Likely, the company is notifying you of changes within the terms of the agreement. (The thicker envelopes are usually new card offers and unless it’s a great deal, it’s best to shred that junk mail.) According to an article from The Motley Fool, two credit issues are set to change their terms.
Bank of America and Wachovia (one of my credit card issuers and my checking bank) are raising their minimum monthly payment from 2% to 4% of the balance. People who have budgeted $150 per month for paying off these credit cards will now have to budget $300 per month to avoid fees.
With credit card interest rates as high as they are, it’s best to stay away from carrying a balance. I use my credit card to pay for almost all of my expenses, but I pay the entire balance off every month. On top of that, my card offers a cash-back rebate which is paid to me by check; in fact, I should shortly be receiving a $200 check for purchases over the last nine months or so.
For most of last year and the year before, I was able to charge my rent to my credit card for an even higher rebate, but my apartment complex has discontinued that ability.
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10:29 am (reply)
I find I spend more when I used to put everything on my credit card and pay it off next month. When it’s being pulled from my checking I think a LOT more about my purchase.
I think the raised minimum payment was something that was passed as law or something like that. I’m sure there are a lot of people that really feel the crunch of having to make a larger payment. It may also be putting the crunch of credit card companies that have customers reducing (possibly) their credit card debt due to larger payments.