NFCU New Minimum Payment policy

[Citylights18]

No. When an issuer is talking about your minimum payment is 2% or 1.5% or 1% balance that means if you have 50,000 on that revolving line that is a difference between $1000, $750 or $500 that you are obligated to have to pay. That does make a difference as far as cash flow is concerned.

It does make sense for people to take on productive debt which is what a mortgage is by leveraging their income. Buying stuff sooner rather than later saves on inflation costs while you are physically able too compared to a time when you are not. You've got to manage the payments effectively though. Know when to go with credit and when to take a loan. That is another problem is people take out outsized 50,000 or 100,000 notes with high payments that don't go down as you pay them off. Very few are skilled with using debt effectively outside of property secured debt (mortgage/HELOCs).

[Brian_Earl_Spilner]

Seems people are making this way more complicated than it needs to be. Bottom line is the portion of balance due every month is cut in half.

For those that live paycheck to paycheck, this frees up more money for them.

For those able to continue making the current minimum payment, they'll pay down the balance faster due to paying less interest.

For everyone else, it's a moot point because the 1% doesn't affect your current payment routine. 

[SouthJamaica]

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@Brian_Earl_Spilner wrote:

Seems people are making this way more complicated than it needs to be. Bottom line is the portion of balance due every month is cut in half.

For those that live paycheck to paycheck, this frees up more money for them.

For those able to continue making the current minimum payment, they'll pay down the balance faster due to paying less interest.

For everyone else, it's a moot point because the 1% doesn't affect your current payment routine. 

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Not so.  If you're accruing interest charges, the new interest is added to the minimum payment.

[Brian_Earl_Spilner]

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@SouthJamaica wrote:

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@Brian_Earl_Spilner wrote:

Seems people are making this way more complicated than it needs to be. Bottom line is the portion of balance due every month is cut in half.

For those that live paycheck to paycheck, this frees up more money for them.

For those able to continue making the current minimum payment, they'll pay down the balance faster due to paying less interest.

For everyone else, it's a moot point because the 1% doesn't affect your current payment routine. 

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Not so.  If you're accruing interest charges, the new interest is added to the minimum payment.

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I said balance, I didn't mention fees or interest. 2% of the balance is now 1% of the balance. The amount of the balance due is cut in half. Add on interest and fees for the minimum payment. 

[Anonymous]

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@Brian_Earl_Spilner wrote:

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@SouthJamaica wrote:

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@Brian_Earl_Spilner wrote:

Seems people are making this way more complicated than it needs to be. Bottom line is the portion of balance due every month is cut in half.

For those that live paycheck to paycheck, this frees up more money for them.

For those able to continue making the current minimum payment, they'll pay down the balance faster due to paying less interest.

For everyone else, it's a moot point because the 1% doesn't affect your current payment routine. 

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Not so.  If you're accruing interest charges, the new interest is added to the minimum payment.

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I said balance, I didn't mention fees or interest. 2% of the balance is now 1% of the balance. The amount of the balance due is cut in half. Add on interest and fees for the minimum payment. 

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No, because "balance" means different things.   In the old system, it was just as it suggests, the bottom line figure on the statement.   In the new system you subtract out this month's interest charges, pay 1% of what remains, and then pay the interest charges.  In some cases, the new minimum payment could be greater than the old one

[Anonymous]

A little off topic, but is the Notice of Claims unusual too?  I don't remember seeing that from other issuers, and what is a reasonable time for things to be resolved?  Seems too vague to stand up to legal challenge (but IANAL)

[ambivalent]

Hi All, Happy 2023!

I received an email from NFCU stating there were changes coming to the CC agreement. Currently, it is any amount past due plus the greater of 2% of the new balance or $20.  The new payment is (if your new balance is at least $20), any past due amount plus the greater of $20, or 1% of your new balance (excluding interest and fees charged during the billing cycle) PLUS interest and fees charged during the billing cycle.

How does this affect the minimum payment? Does this mean it is going up? I don't have a CC balance with them right now, but DH does. 

I searched the forum, so if there is a discussion on this, if you could kindly point me in that direction, that would be great. Thanks!

[Kforce]

Moved as I was typing

[ambivalent]

Thanks for moving! I knew it had to be on here somewhere, but I couldn't find it for whatever reason in the search.

[K-in-Boston]

In a more perfect world, searches for Navy Federal would also show results for NFCU.