High Minimum Payment from Discover

[Anonymous]

My Discover More statement just cut. My minimum payment is $40. That's a lot. You might think I charged a lot this month. Well, the balance total is only $220. I already paid it off today. I have, however, never seen such a high minimum payment with such a small balance. Is that Discover's very own way of calculating minimum payments? Other Discover More users?

[DI]

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@Anonymous wrote:

My Discover More statement just cut. My minimum payment is $40. That's a lot. You might think I charged a lot this month. Well, the balance total is only $220. I already paid it off today. I have, however, never seen such a high minimum payment with such a small balance. Is that Discover's very own way of calculating minimum payments? Other Discover More users?

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That minimum amount is  18%  of the total balance.  That's far from the 4% minimum payment requirement set by Discover.  I always PIF, but I noticed one time when I had a small balance of less than $20, the full amount was due. 

[andre181]

That is definitely strange. The highest balance I've had on my discovery more card is ~$325 and my min. payment was still only $15

[Anonymous]

The terms and conditions for the Discover More card says:

The minimum payment each billing period will be $40 or 2% of the new balance, whichever is greater.

[andre181]

Weird. My min. payment has never been greater than $15

[bostonte]

This is a result of the CARD act.

It requires penalty fees to be "reasonable and proportional", and made the Federal Reserve / OCC/ etc. determine final rules regarding what that means.

One of the main conditions they came up with: a late payment fee cannot exceed the amount of the required minimum payment that needed to be made to avoid the fee.

So if Discover wishes to continue collecting $39 late fees, moving the minimum payment to $40 was required.

[Anonymous]

Wow!   I've never paid attention to it because I always PIF the balance by the due date.   This thread got me curious.   Ok, my November statement balance is $116  and minimum payment is $40.   This is since 2010 Jan statement, either $40 or full amount.   On my 2009 Dec statement, the balance was $58 and the minimum due was $15. 

[tsquad131]

Every bank is changing their minimum payments to be higher cuz of the card act I already received letters from capital one and hsbc about the revised terms

[Anonymous]

I see. Good information from other posters. It makes sense that the revised CC rules have triggered this change in minimum payment charges.

It might be an issue for those who, say, have 0% introductory offers on their cards and have yet to make higher payments every month. In other ways, though, I think it's not too bad because the more you pay off, the better for you. I know for sure that Discover doesn't do this to help customers but to protect themselves. That's certain.

I have yet to see these high minimum payments from my other cards...

[Anonymous]

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@Anonymous wrote:

The terms and conditions for the Discover More card says:

The minimum payment each billing period will be $40 or 2% of the new balance, whichever is greater.

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Not sure if I agree with this. I just checked my discover account and min payment due is $20.00. The card is always auto paid from discover on due date for full amount since I got the card. I checked the statement going back a few months and the min payment is always $20.00 - this too on varying balances of 271.xx, 204.xx etc....