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Debt Destroy

Lower Monthly Credit Card Payments

The credit card industry has seen a lot of changes in the past several months. 

Many cardholders have been struck by subtle minimum balance payment hikes, while others a more drastic increase from 2% of the principal outstanding to 4%. If you were struggling to keep up with payments before the increase, you might find yourself unable to meet the new minimum payment requirements.  On the other hand, if you can manage to meet the new payment, the credit card company might be doing you a favor. Without this nudge, it would have taken longer to repay your debt therefore increasing the amount of money repaid in the long run. 

Why the Minimum Balance Increases?

Lenders and borrowers have been through a period of turmoil.  For many years credit card companies have wooed everyone from college students to seniors with offers of easy credit.  Allowing card holders to rack up a large balance and pay only a small amount each month was a great strategy to make more money off of interest rates and fees.  With more people facing financial hardships as a result of the recession, banks are trying to recoup as much of their money as possible or risk losing it all to bankruptcy or debt settlements.  Thus the sudden interest in receiving a monthly payment that actually reduces your debt. 

How Can You Lower Monthly Credit Card Payments?

There are a few things you can do if you really can’t manage the increased payments.  

  • Shop Around for Different Cards:  While more credit card companies are upping the minimum payment it has not yet become the norm.  Research and compare different credit cards to find a card that still accepts 2% of the balance as the minimum payment.  If approved you can transfer your balance to the new card.
  • Negotiate Directly with the Credit Card Company:  Everything is negotiable. Make a call to your card company letting them know that you are not able to meet the new minimum payment.  Find out what options are available to keep your payments affordable.  You might be surprised at how much they are willing to concede if you approach them with respect and convince them that you are earnest about paying but you simply cannot meet the new requirements. When all else fails let it slip that you have been exploring your options with other companies and if you are backed against a wall you may have to transfer your account.
  • Consider Credit Counseling:  Credit counseling agencies negotiate with credit card companies on a daily basis. If you have tried working with your credit card company on your own without success it might be time to call in the professionals.
  The best approach to lower monthly payments is to stop incurring new debt while aggressively attacking your current balance. Instead of bemoaning the higher monthly minimum balances you can look at it as a sign that your debt situation is out of control and take steps to rein it in. Trying to secure lower monthly minimum payment balances can be the motivation you need to get your finances in order.


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