11/22/2005

Minimum payments on the rise

Recently credit card companies have raised the minimum monthly payment. This is in effort to help the consumers get out of debt. Yet, those most impacted by this (which need the most help) feel like they are being cheated. I feel that an attorney in the article who is fighting for the consumers makes a statement that actually proves the point at hand when he said, "Lots of people are going to find themselves in serious trouble because many people don't have the discipline to handle consumer debt." How correct Koplen is! That is precisely the problem. People get these credit cards and somehow get the idea that they have "free money." So they start spending without thinking of how they are going to repay the debt. I think credit cards are good, but they definitely require discipline. Also, by helping people get out of debt, we are essentially helping our economy. The fewer bankruptcies filled, the stronger the morale in society.
An immediate result of this rise in montly payments is that consumers are using alternate forms of payment at the registers. The numbers of people relying on credit cards is expected to fall from last year's 29.5 percent to 28.2. So with that in mind, will the new minimums have a negative impact on the credit card companies? I highly doubt it!

2 comments:

Morgan said...

I think this new rise in the minimum payment required for credit cards is great! For those that use their credit cards responsibly, and pay their balance in full every month, there will be no impact. And for those that spend all kinds of money they don't have, they'll either have to shape up, or start saying sianara to all of the mounds of material goods they can't afford.

Tyler said...

I think what credit card companies are doing is a strategic move on their part. Most people obtain credit cards, max them out and then pay the minimum payment for years until it’s paid off. By increasing the minimum monthly payment, the credit card companies are simply reducing the risk that is associated with credit cards. On the other hand as Conner stated this also helps the consumer reduce their credit card debt, therefore hopefully creating a trend.