How To Prevent a Credit Card Minimum Payment from Increasing

Minimum card payments used to be set at 2% of the outstanding balance. However, since 2005, Federal law has regulated that card companies increase the minimum payment to 4% of the outstanding balance. As a consumer, you may think that is unfavorable to you, but in reality, this regulation is to help the American card user. Increasing the minimum card payment by an additional two percent can reduce debt payments from 20 to 30 years down to only ten years. This will save the consumer hundreds to thousands of dollars of interest payments.

However, if you find your minimum payments still too high, you have some options. Here's how to prevent your credit card minimum payment from increasing.

  1. Make the effort to pay the revised minimum payment. In fact, don't just pay the minimum fees. Go ahead and pay more than the minimum. The sooner you get out of debt, the better.
  2. Stop using your credit card. Set a budget and stick to it. Use cash for your transactions. Don't overburden your card limit and keep charging to it. You'll never get out of debt that way. This way, you minimum payment will keep decreasing each month as you make a monthly headway in eliminating your debt.
  3. Call your card issuer and talk to a representative about lowering your card payments. Be honest and tell the bank you cannot afford the new minimum amount but you are willing to pay. Ask what your options are. Banks are willing to work with consumers rather than have you default on the loan.
  4. See if your interest payment can be lowered. If you have otherwise good credit and payment history, the card issuer may concede. But you have to ask for it.
  5. Ask if your payment schedule can be deferred or changed. Another option is to ask if you can keep your current minimum percentage but the bank may ask to increase the interest payment instead. Weigh your options and see what works for you before agreeing to anything.
  6. Be prepared to show financial documents such as bank statements or prior income statements to illustrate your financial situation to the bank.
  7. Balance transfer to another card. Find another card issuer that offers a good interest rate and reasonable minimum payment percent due. As long as you pay the agreed amount, your interest rate will not change for the duration of the terms of agreement.
  8. Consider getting a personal loan to pay off the card if the terms are better. Talk to a loan agent about the amount you need and how much you will need to pay monthly. However, don't pay off the card then incur new debt on other credit cards.

Be vigilant about paying off debt and keeping your credit history in good standing. Even if the bank agrees to lower your minimum card payments, go ahead and pay as much of it you can anyway. Do not default on your loan because you feel it is hopeless. Be responsible with your credit cards.


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