Minimum Payment Increases – How to Handle these Unwelcomed Changes
Many credit card companies have recently begun raising the minimum payments for their card holders, much to the dismay of the card holders. These minimum payment increases are often the answer for credit card companies that are fighting back against the new credit card legislation recently signed into law by President Obama.
Many credit card companies fear that they will lose significant revenue due to the recent credit card legislation, so they have begun increasing minimum payments as a result. Although the new law will place tight restrictions on things such as interest rate hikes, there is no law in place when it comes to an issuer’s minimum payment schedule.
Many credit card holders, however, may see their credit card minimum payments jump to unmanageable levels, thereby preventing them from making the required payment. For many consumers in today’s tough economic climate, this change could ultimately destroy their credit.
So, the question is: as a card holder, is there anything you can do to fight these minimum payment increases?
- Consider the card’s opt-out provision. An opt-out provision, which must be offered to cardholders in the event that the issuer raises minimum payments, is essentially an agreement that allows a cardholder to keep the original terms on the card if he/she closes the account.
- Contact your credit card company and negotiate. If you have been a loyal customer and have always paid your bills on time then you may have room to negotiate. Many credit card companies will negotiate with you regarding a change in your minimum payments if you have proven yourself to be a dependable customer.
- Consider a balance transfer. If you get nowhere with your credit card company, then you may want to consider transferring your balance to another open credit card. Of course, you will also need to carefully consider the pros and cons of a balance transfer, including balance transfer fees, the interest rate on the other card and, of course, the minimum payment requirements on the other card.
The bottom line is that you don’t need to accept a minimum payment increase. You do have rights and options, so explore them before a minimum payment increase wreaks havoc on your good credit score.
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