ABC News: Millions Brace for Higher Credit Card Payments:
Forced to Pay More Every Month …
Millions of consumers who carry monthly balances are getting hit this month with higher minimum payment requirements as card issuers start implementing the January 2003 guidelines issued by the Federal Reserve, the Office of the Comptroller of the Currency and other federal regulators.
The companies require that minimum payments go toward monthly interest charges as well as toward the principal. Instead of paying a 2 percent minimum, consumers will be required to pay at least 4 percent each month.
Some consumers, however, may not see an increase because the payments they are making already include a reasonable amount of principal, said Barbara Grunkemeyer, deputy comptroller for credit risk with the Office of the Comptroller.
… Even If It's for Your Own Good
The new rules are meant to get people to pay down their debt faster, but in the short term many who get by paying just the minimum are concerned about how they'll pay more. 'It's creating a lot of stress and a lot of worry,' said Nick Jacobs, a spokesman for the National Foundation for Credit Counseling, adding, 'but at the same time, the essential motive or the intent is to get out of debt faster, and that's a good one.'
If someone has a $1,000 balance and pays $15 a month, it would take 17 years and cost about $3,000 in principal and interest, he said. Paying $20 a month would take seven years and cost $1,750 in interest."
Why does the government have to stick their nose into everything? Everything they do now is a failure, so why expand?
Forced to Pay More Every Month …
Millions of consumers who carry monthly balances are getting hit this month with higher minimum payment requirements as card issuers start implementing the January 2003 guidelines issued by the Federal Reserve, the Office of the Comptroller of the Currency and other federal regulators.
The companies require that minimum payments go toward monthly interest charges as well as toward the principal. Instead of paying a 2 percent minimum, consumers will be required to pay at least 4 percent each month.
Some consumers, however, may not see an increase because the payments they are making already include a reasonable amount of principal, said Barbara Grunkemeyer, deputy comptroller for credit risk with the Office of the Comptroller.
… Even If It's for Your Own Good
The new rules are meant to get people to pay down their debt faster, but in the short term many who get by paying just the minimum are concerned about how they'll pay more. 'It's creating a lot of stress and a lot of worry,' said Nick Jacobs, a spokesman for the National Foundation for Credit Counseling, adding, 'but at the same time, the essential motive or the intent is to get out of debt faster, and that's a good one.'
If someone has a $1,000 balance and pays $15 a month, it would take 17 years and cost about $3,000 in principal and interest, he said. Paying $20 a month would take seven years and cost $1,750 in interest."
Why does the government have to stick their nose into everything? Everything they do now is a failure, so why expand?
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