Credit Cards Double Minimum Payments

(CBS) CHICAGO Coming soon to a credit card near you -- double minimum payments.

CBS 2 consumer reporter Dorothy Tucker reports how new banking rules could affect your bottom line.

“It disappoints me that they would have control over your lives,” said Cetrina Williams.

They are the credit card companies which have already put Williams on notice that her minimum payments will double in January. That means her current monthly payments of $80 could soon jump to $160.

“I have certain funds allocated for certain expenses and if that nearly doubled I would definitely have to re-align my budget,” Williams said.

She is among the millions who will see their credit card minimums rise because of new rules in the banking industry.

Federal regulators are advising banks to raise minimums from 2 to 4 percent so our payments will cover more of the principal and less of the interest.

“It's always a good idea to pay less interest, but I am concerned that this could push consumers that are having some problems … could push them over the edge,” said Catherine Williams at Money Management Intl.

If you're living on the financial edge, like 40 percent of Americans, then Catherine Williams says you need to back off your credit cards.

“Curb all unnecessary spending. I mean that down to the extra latte and the extra newspaper,” she said.

Williams also advises you to contact your credit card company if you're having problems.

“Explain what's going on. Always do it before you miss a payment. They have more tools available if you are not already behind,” she said.

And if your credit is good, like Cetrina's, ask for a lower interest rate. Experts say be polite but firm.

“If the manager will not lower your rate, then threaten to close your account or transfer your balance to another card,” said Curtis Arnold at CardRatings.com.

How much a bank or credit card company raises their minimum payments will vary, so you should shop around...

Source: cbs2chicago.com

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