Attention Credit Card Holders

Discussion in 'General Conversation' started by FS Driver, Dec 25, 2005.

  1. FS Driver

    FS Driver New Member

    Messages:
    2,323
    State:
    swansea,illinoi
    just thought this might be of a little help to those that havent heard.
    your credit card payments more than likley will be raiseing the minimum
    monthly payment you are allowed to make starting thuis next year .
    so if your payment (minimum) is 200 dollars you will be required to pay 400
    instead.
    i just this past week learned of this by hearing a radio show and confirmed it
    through my bank.
    might have been why they asked me about considering a debt consolidation
    or home equity loan a few months back.
    kinda wished they would have told me about the payment going up sooner as
    we just a few days ago got our ball rolling on a home equity line of credit
    to wipe out several higher credit card payments and we will be saving not
    only in the long run but a lower monthly overall debt payment now at a tremendously lower percentage.allowing us to double up on the payments and
    pay off our loans quicker.

    i'm no financial expert but i thought this may be of interest to some.
    MERRY CHRISTMAS !!!!!!!!!!
     
  2. brad kilpatrick

    brad kilpatrick New Member

    Messages:
    2,666
    State:
    Kansas City
    Those dog gone credit cards will kill you. We paid off all our credit card debt this past summer. You can't imagine how much money that freed up every month.

    Now we only charge what we can pay off in two payments!!
     

  3. FS Driver

    FS Driver New Member

    Messages:
    2,323
    State:
    swansea,illinoi
    yep it is a taken for granted thing that can consume so much money its sickening.

    a 10,000 dollar debt will never be paid off makeing minimum monthly payments .
    and a small item such as a toaster or a hair dryer costing 20 bucks put on a card that has a substantial amount on it allready is going to end costing you several hundred dollars even up to a thousand or more depending on how long it takes you to get it paid off.
    best way to buy something is put it in layaway or just save up .
    get a christmas club account going.
    use one credit card for emergency use only .
     
  4. brad kilpatrick

    brad kilpatrick New Member

    Messages:
    2,666
    State:
    Kansas City
    Yep, ...When the old lady comes home and says..... "But it was on sale!!!"

    Its not on sale if you put it on a credit card. unless you pay it off directly, you'll end up paying full price and then some. It can be a pretty visious circle.

    When I use mine now, the money comes right out of My spending money. By My own rules that item has to be paid in full with four paychecks. So I think long and hard before using the card, a lot of time I just stash some cash and save up for it.
     
  5. H2O Mellon

    H2O Mellon New Member

    Messages:
    3,012
    State:
    Ohio
    While its true that min pmts went up, they shouldnt double or anything like that. I think for instance I saw @ work (I work for a Credit Union) I saw something that had an example of a card w/ a 3% min pmt going from $53 to $83 & one that was at $300 would go to $330. Now of corse anything is possible.
     
  6. FS Driver

    FS Driver New Member

    Messages:
    2,323
    State:
    swansea,illinoi
    watermellon better look into it .
    i asked the bank and they said double.
    they were supposed to be gradually doing it but it looks like it will be a
    sudden increase.
    not saying your wrong but i did ask and went throught the process
    so i aint blowin smoke .
    if it were an increase of 10-20 dollars i doubt if i would have posted this.
     
  7. FS Driver

    FS Driver New Member

    Messages:
    2,323
    State:
    swansea,illinoi
    http://seattletimes.nwsource.com/html/businesstechnology/2002439855_pfcreditcards14.html

    http://moneycentral.msn.com/content/Banking/creditcardsmarts/P117014.asp

    heres a snipit off a article i found and this is one of many that say double

    so you be the judge

    i dont see why my bank would have not told me the truth,and i have nothing to gain telling a lie .







    I live in San Jose, Ca. As stated above, my creditors have already raised my payments from $53/$85 to $301/$330. and said that they will double in January. I now have 2 huge payments which I can't afford, I'm in the process of trying to get a Home Equity line of credit to pay them off or possibly a 2nd? However, I'm concerned if I was to lose my job, I will then lose my home. Should I put my home on the line with my unsecure debt? If I tell my creditors that I can only pay a small amount, can they sue me for the payment due in full now? I have not paid them for 3 months and let them know that I am trying to get a line of credit to pay them off in full. If I do not get a loan and start paying them a small amount, Will they charge off my debt and will they stop charging me a late fee $39. and over limit fee $39.? I understand my credit will be recked, but I'm worried if they sue me, how will I get the money to pay them back? I will probably be forced to sale my home, which I don't ever want to do this. I have a 30 year fixed 1st at 5.5% which I don't want to touch. Is it true, that you can tell the creditors what amount you can afford to pay them, and thet have to except this as your monthly payment? Even if I pay them a less then what they want, what is the possiblities of them sueing me? If you can't answer my questions, please send me a referal. Thank you for your time and any help that you can give me.
     
  8. teaysvalleyguy

    teaysvalleyguy New Member

    Messages:
    9,751
    State:
    GC, OHIO
    I work in real estate so I know a little about this. Yes it is true that they passed a law that enables the credit card companies to double the minimun payment and also you are not allowed to file them in bankrupsies anymore. More and more people are refinancing to take care of this debt, good luck if you do. Do not get suckered into any arm that is not fixed for at least 2 years and watch out for interest only loans. Sound great but you are basically just renting and not paying anything to the Principal. Good luck with this situation.
     
  9. H2O Mellon

    H2O Mellon New Member

    Messages:
    3,012
    State:
    Ohio
    Guys, very few credit card companies have payments of 2% of the balance. Most are 3%. So when I say most are not going to double they wont. Yes, some companies may increase to 4%, but most are at a repayment of 3%.

    Here is a point from one of the articles DRC provide, which is a much better scenairo of what you might see:

    "If you're living paycheck to paycheck and your minimum payment goes from $200 to $275, spread over five cards, that's an extra $375 a month," says Brauer. "A lot of families can't come up with that." The banks already know that and are planning for it. Bank of America, one of the first to raise minimum payment requirements, worked an extra $130 million into its 2005 budget to cover projected losses from defaulting cardholders.


    Chapter 7 & Chapter 13's:

    Unsecured debt is still dischargable under Chapter 7 & Chapter 13 protection. Prior to 10/17/05 it was much easier to walk away from all debt & commiments other than Delquient Taxes, Student Loans and a couple other debts that were & still are un-dischargable. BK 7 was known as the "walk away" BK, BK 13 was the BK that you filed & paid a certain % of creditors back. 0% to 100%, yes there are/were TONs of 0% BK13 plans. How this comes to be is as follows: Lets say John Doe has a loan @ XYZ Credit Union (we're going to use Credit Union, becasue thats how it should be! ;) ) for a 1999 Chevy S10 & owes $6500 on it and also has a signature loan for $2500 & a credit card through the same credit union w/ a balance of $3000. If that person wanted to keep the Chevy S10, techinally they need to reafirm the loan, to basically agree in their BK Case to repay the loan back. In ideal situations the credit union would get 100% of the money back, but that rarely happens. The truck may be valued @ wholesale of $3000, so the persons attorney makes what is basically an offer to the credit union to pay back $3000. The credit union would most likely say no, but if you agree to pay $300 for the truck & x% of the signature loans & credit card then we'll do it. The attorney could still come back & say no. Then it would be up to the credit union to repo the truck, but sense the person has filed for BK protection, a repo cant just take place like normal. The credit union has to file for whats called a motion for releif from stay or wait until the BK is discharged. Now in the past most attorneys would not let the person replay the sig debt, which in return lead to a high # of BK7's versus bk 13's or Reaffed (reaffirmation) BK 7's. With the new laws more people will be paying back some of that unsecured debt. To make months & months of debate extremely simple here is whats happened:

    Biggie #1: Before anyone can file a new BK, he/she must take part in a credit counseling seccion or class, approved by the local BK district (filing district).

    Biggie #2: If the local BK courts and/or BK trustee find you to be able to pay x% of your debts back, thats what you will have to do.

    (Biggie for my line of work) #3: Creditors can name request retail value of the auto/boat/rec vehicle versus the past wholesale value of an auto. So that S10 mentioned above that only had a wholesale value of $3000 above could not possibilly have a retail value of $5000. (see how its now in the creditors favor)

    Dont get me wrong creditors still loose a TON of $ to BK's but now if the creditor has the means to pay back some of it, they will be forced to do so.

    The results of the new laws are seeing (& will continue to see) less BK7's filed & more BK 13's filed.

    FYI: somepeople put a dark mark on BL's & those who have filed, but I am here to tell you, thats not the case. I am speaking from experience, personal & professionally, BK Laws were meant to help honest people who for whatever had a rough time. Just like any program or law, there are those who will abuse it.

    So your probabaly asking "Where does this fit in with the credit card pmts", well... In my opinon had more companies went w/ the increase last year, even if it was an increase of $75 from $300 I think it would have forced more people into BK and there were already record people filing.

    I will find out more for sure on Tuesday from work, but I am almost certain that the normal 3% that credit card companies charge is legally not allowed to double to 6%. I will check for sure. So like I said I dont think many will double, some will, sure, but that should be ones that have had a below normal repayment % anyways.
     
  10. H2O Mellon

    H2O Mellon New Member

    Messages:
    3,012
    State:
    Ohio
    Heres some info from CNN's Money section:

    At the end of the year, credit card issuers are expected to boost their minimum amounts owed from about 2 percent to 3 percent.

    I like this suggestion!
    Use a card that doesn't have the risk! Joseph Ridout of Consumer Action recommends credit union credit cards.

    After doing lots of internet research, DRC your right, it seems as if many of the big higher rate credit card companie in the last year dropped their payment rate down to 2%. (They did this to suck more intrest out of the hard working families)

    I tell ya what, it may be cheaper for some people to apply for signature loans to repay their credit card balances off! A good idea may be to use yout tax return to pay down or pay off some credit card debt.
     
  11. Cyclops01

    Cyclops01 New Member

    Messages:
    578
    State:
    Eden, NC.
    I chopped up all of my credit cards several months ago and will never, EVER have another as long as I live. My cash & check debit card is as close as I'll get. It works everywhere a credit card will but, no more cash... no more purchases.

    My all time favorite credit card was Sears. Their interest rate is twenty something percent. My balance was like $7,000.00 and every month I would get a statement showing a big goose egg for a "minimum" and NO regular payment figure. I'd send in a couple hundred here, a hundred there and a now & then payment of five hundred dollars. The balance would go down some but then move back up again. A couple months after I stopped using the card, they raised my credit limit a couple thousand bucks. Incentive to come back and use the card some more??? You betcha buddy it is!!!

    The credit card companies WANT us under their thumb for life. And they do it by making it so easy. Then, they trap us even deeper in debt by offering "consolidation loans" and their blank checks to pay off the other card companies. The only difference between Visa and Louie the loan shark is, after you die, Visa can get a legal grab on your estate.

    The absolute worst thing anyone can do is borrow money to pay off credit debt. It only replaces one debt for another.

    Just like with drugs, just say no to credit cards.

    Mike
     
  12. FS Driver

    FS Driver New Member

    Messages:
    2,323
    State:
    swansea,illinoi
    from what i understand the deal we made at the bank will have us paying our house off quicker and free up several hundred in credit card dept ,
    and makeing us pay a fixed loan repayment that has a low percentage
    rate. it is not a balloon type setup ,it stays the same indefinately is what
    our bank told us. does this sound like a bad idea/???
    is a home equity line of credit the same as borrowing to pay off?
     
  13. Little Mac

    Little Mac Active Member

    Messages:
    1,828
    State:
    NW Arkansa
    Im kinda like Mike, Cashncarry. we have 2 cards that we use for emergency only then pay them off as soon as possible. The only thing I will finance is a vehicle. I own my home because I built it outa my own pocket and everything I have was bought by saving or trading. My land I bought from my Dad and he carries the note. Fixed intrest for 15 years and its mine. When I was younger I got into some deep debt with credit cards because I didnt possess the "know how" of how they really work, Once that was taken care of I swore I would never get into that again. Be smart its so easy to "charge" LOL
     
  14. GaryF

    GaryF New Member

    Messages:
    3,649
    State:
    O.P., KS
    DRC

    I think there is nothing wrong with borrowing at a lower rate to pay off credit card debt, as long as it's part of a realistic debt reduction plan. The trap is that most people will turn around and run their credit cards back up, and then they have more debt than ever, with little no option for additional consolidation. Unless the behavior changes, consolidation only allows them to get stuck a little deeper, and in my experience, that is what happens to most people.
     
  15. H2O Mellon

    H2O Mellon New Member

    Messages:
    3,012
    State:
    Ohio
    DRC,

    Yes why not take advantage of the lower rate. Good choice.