Credit Cards

[ilovepizza]

This is only for new issued cards starting from $0 bal.

People would actually start paying down debt regardless of interest.
People would probably need to spend less to be able to afford the minimum payment.
People would be less likely to get stuck in huge debt they can't pay back.

On the other hand,
People who loose their jobs would end up defaulting sooner not being able to extend credit.
People who are responsible with credit would not be able to take advantage of low APRs.

What are your opinions of the 10% minimum payment for new issued CCs?

(They are not really pushing for 10% this was hypothetical) But some are pushing for more than 2% to protect consumers who are unaware of interest and balances.

Message Edited by ilovepizza on 09-02-2008 05:35 PM

[athensguy]

1% + Finance Charges is good enough for me. I guess it doesn't matter that much, but if it switched to 10%, there would be a whole lot of charge offs a few months later.

[Cheapskate]

The math is simple enough. And let's face it. If you can't pay down 10%, you shouldn't be using credit cards.

Unfortunately for those who are in debt and just can't seem to get back on track, it would mean a lot of surcharges for not making the minimum payment, then those surcharges would go over the credit limit....more fees for that.

I don't know. Credit card companies seem to have a highway robbery scheme for people who don't pay off in full. Random APR raises, sometimes up into the 30% range. They don't need another 10% rule to help them any more.

I'm mixed on the thought.

[Creditaddict]

my Von Maur Store card is 10%

I believe Neiman Marcus is also.

sure does make a difference on getting out of debt fast, but would def. change my charging habits in the past, I say past because I pay monthly now but do have a lot of debt from my previous days of charging!

[Timothy]

Great idea- $1000 charge at 14.99% 10% min payment $15 min payment will STILL take 32 months to pay off making min payments.

Sorry it's hard to read-

 Prin  Pay Int New bal
1 1000.00 0 12.50 1012.50
2 1012.50 101.25 12.66 923.91
3 923.91 92.39 11.55 843.07
4 843.07 84.31 10.54 769.30
5 769.30 76.93 9.62 701.99
6 701.99 70.20 8.78 640.56
7 640.56 64.06 8.01 584.52
8 584.52 58.45 7.31 533.37
9 533.37 53.34 6.67 486.70
10 486.70 48.67 6.08 444.12
11 444.12 44.41 5.55 405.26
12 405.26 40.53 5.07 369.80
13 369.80 36.98 4.62 337.44
14 337.44 33.74 4.22 307.91
15 307.91 30.79 3.85 280.97
16 280.97 28.10 3.51 256.39
17 256.39 25.64 3.21 233.95
18 233.95 23.40 2.92 213.48
19 213.48 21.35 2.67 194.80
20 194.80 19.48 2.44 177.76
21 177.76 17.78 2.22 162.21
22 162.21 16.22 2.03 148.01
23 148.01 15.00 1.85 134.86
24 134.86 15.00 1.69 121.55
25 121.55 15.00 1.52 108.07
26 108.07 15.00 1.35 94.42
27 94.42 15.00 1.18 80.60
28 80.60 15.00 1.01 66.61
29 66.61 15.00 0.83 52.44
30 52.44 15.00 0.66 38.10
31 38.10 15.00 0.48 23.57
32 23.57 15.00 0.29 8.87
33 8.87 15.00 0.11 -6.02

Message Edited by Timothy on 09-02-2008 10:35 PM

Message Edited by Timothy on 09-02-2008 10:36 PM

[Timothy]

$1000 charge at 14.99% 2% min payment $15 min payment will  take 118 months to pay off making min payments. about $884 in interest.

[fused]

Ack!!!!!!! I say PIF and never mind the the FICO brownie points for util under 9%.

[haulingthescoreup]

Deeply allergic to giving anyone at all a penny in interest.

I'd hate to see them require a 10% minimum, for the very reasons you list, but it would be cool if they had a Credit Surgeon General's warning stating: at the current minimum payment rate, it will take you ___ months to pay off this balance and cost you ___ in interest. Print this on every single statement, individualized for each one. And it would need to be up at the top, right under the balance and minimum payment due figures, not buried somewhere on p.5.

Wouldn't take but a few lines of code to set up, I'll bet, but it would take away space from all those valuable offers that they like to cram onto statements these days.

[sidewinder]

---

haulingthescoreup wrote:
Deeply allergic to giving anyone at all a penny in interest.

I'd hate to see them require a 10% minimum, for the very reasons you list, but it would be cool if they had a Credit Surgeon General's warning stating: at the current minimum payment rate, it will take you ___ months to pay off this balance and cost you ___ in interest. Print this on every single statement, individualized for each one. And it would need to be up at the top, right under the balance and minimum payment due figures, not buried somewhere on p.5.

Wouldn't take but a few lines of code to set up, I'll bet, but it would take away space from all those valuable offers that they like to cram onto statements these days.

---

I agree with that.

Many people do not understand how that really works.

Discover offers some type of tool of this sort on their website. Not sure if it is only for Discover customers or not, but it shows them how long it will take them to get out of debt and what not. Saw the advertisement.

[woopah]

A lot of people would file bankrupcy, or just not pay their cards anymore.