To have it paid off by 5/2011, you would need to pay more than 5% of the remaining balance. As the balance goes down, your payment would also. Even if the first payment was 5% of the balance and you continued to pay that amount in dollars for the whole period, it would take almost two years.
I have a low interest, 2.5 year BT from Chase. I am paying a bit more than 5% at the third month of the 2.5 years. The required minimum payment according to my current statement is about 1.85%. If I was silly enough to pay that little, I would still owe a lot in mid 2001.
Are you looking for reasonable interest rate and payment OR are you looking for an unreasonable low interest rate and payment, which would put most people in a difficult situation at the end of the term?
From indications so far, this is the second wave of minimum payment increases aimed at customers who have an account balance from a low-APR (6.99% or less) life-of-the-balance BT. Either the BT or the account is at least two years old, and generally there have been no other purchases on the account, only the BT. It is clearly Chase's purpose (justified or not) to accelerate the repayment schedule so a customer is not stretching repayment to 10-12-15 years at a fixed 2.99%, 3.99%, etc. rate, by paying only 2% monthly on a slowly-decreasing principal.
It is quite similar to the action Chase took at the beginning of the year with the $10 fee (rescinded due to legal challenges) and 5% minimum payment. It appears this wave includes customers with 5.99% and 6.99% APRs (not included in the previous wave) and customers who have reached the 2-year milestone since January.
Some customers have reported being offered alternatives by CSRs, such as keeping their 2% minimum payment if they agree to have their APR increased.
From reports I've read so far, this minimum payment increase does not affect fixed-term BT offers (such as the 2011 BT) or "normal" accounts ...
850,000 Chase card holders with low fixed rates were targeted this week with a payment increase that will more than double the payment each month with out a opt-out option. Although I haven't received any letters, I did receive BT checks good through May 2011. I thought wow!, but now that I heard this news, I will not use them!
Analysts have decided they need to take low interest money off the table so they can re-issue it at higher rates and profit margins.
I'm currently using my 2nd BT from Chase (disney). I always pay off in 1 yr - take amount, divide by 12 and that is my monthly payment. Never go by the min amount due. Maybe this is why they have not bothered me. I like to use BT's for payment history.
On my second card (perfectcard) I received notice that the apr is changing to 10.24% (it was 9.24). When I opened the account (May '08) the terms were 0% for 6months then 10.99; but instead dropped to 9.24 matching my disney account. So in August they will up the rate to 1pt: I consider myself lucky! Also, this is a PIF before statement cuts so apr does not matter.
Assuming that you are talking about the 5% of balance minimum payment I would say no one should be using a card for purchases or taking BT's if they can't pay at least 5% every month. Even at this rate it would take almost two years to pay off the loan. This is NOT what CC's were meant to be used for. Somehow we have morphed into believing CC's are a long term viable alternative to the old sytle fixed rate loan you would get from your local banker. They aren't. In the wrong hands they are deadly. People should stay away from using them as a long term funding option.Message Edited by Watchmann on 06-28-2009 07:28 AM