Credit Card Quick

Minimum Payment Increases – How to Handle these Unwelcomed Changes

Choosing Credit Card

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.

Why Credit Cards are often better than Cash

Credit Card Rewards Introduction

It would make sense that cash is better than credit when making purchases. However, given the many benefits of today’s credit cards, this is not always the case.

For both business and personal use, credit cards may prove to be a very effective financial tool for credit card holders.

Credit Card Benefits

• Purchase Protection – If you receive an item that is unsatisfactory and the company or manufacturer is unwilling to grant you a refund, or if you purchase an item that arrives damaged, or not at all, the purchase protection feature on your credit card may cover your expenses.
• Extended warranty – Many purchases on a credit card come with the protection of an extended warranty. For example, electronics may be covered with a warranty that covers the purchase on top of the store or manufacturer’s warranty. Most credit cards offer a 90-day extended warranty on most purchases.
• Rewards – Many of today’s credit cards offer rewards of many kinds, such as cash-back rewards or rewards for products and services. For example, some credit cards enable credit card holders to earn points toward free hotel stays, airfare or reduced vacations. In other words, simply using your credit cards for purchases may earn you cash rebates or free products or services.
• Access to Emergency Money – A credit card in your back pocket may provide you with financial protection during an emergency situation where cash isn’t available. An emergency airline ticket, rental car, vehicle repair costs or even a new furnace are all necessary purchases that may not be attainable if it weren’t for the convenience of a credit card.
• Financial Bookkeeping – Credit cards are a very useful financial tool for tracking expenditures and maintaining finances. Credit cards, for both personal and business use, provide an individual with a clear record of all expenses.
• Convenience – Perhaps the most popular reason for using a credit card is the sheer convenience of it. Most individuals who use frequently use credit cards cite the practicality of not carrying cash as the biggest reason for using a credit card for purchases.