I know the answer intuitively but I still have to ask...

[Anonymous]

Why are minimum payments so low (PROFIT, PROFIT, PROFIT, I assume) but a $29 min pymt on a $2,952 balance?  My heirs will be paying that off and they're not even born yet!

[Anonymous]

you're paying the entire interest charge for that month and 1% of the balance on the card. they do that to minimize payments so you think it's affordable but their profit margin is ridiculous. that's why i don't feel bad for using their rewards lol

[Anonymous]

Right. But I am confused. I thought they made a big ordeal about this and basically doubled minimum payments. Did they go back on that or what?

[Anonymous]

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@Anonymous wrote:

Why are minimum payments so low (PROFIT, PROFIT, PROFIT, I assume) but a $29 min pymt on a $2,952 balance?  My heirs will be paying that off and they're not even born yet!

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Right, it's designed to be just enough so that total balance doesn't increase, but ensures that those paying the minimum will pay a lot of interest.   They also have to watch out for the risk of default though, hence CLD or closure when they feel the risk is too high.

[Anonymous]

Yep the min is just that, its the min. It's what you can pay without increasing your debt. It doesn't necessarily represent what they would like you to pay, and definitely not what you should pay.

[Anonymous]

Credit cards in general make little sense to logical human beings. There are a few folks on this forum with 3 to 4 times their annual income in credit limit. A virtual impossibility to afford even interest only payments on a balance that many multiples of your annual income (especially when APRs are in the double digits). That's in no way a critique of such limit seekers (I am one of them) but the mindset of card companies handing out far more credit than one can sustainably use. 

[Anonymous]

Absolutely. If I were max out all my available credit, no way could I ever afford to pay it off.

[Themanwhocan]

Its a profit deal!

https://www.youtube.com/watch?v=TobEiGVwoI8