About This Credit Card Directory
TPIF is a portal of credit card and loan offers applicable online. Browse through the offers, compare the terms and apply for the best one! Comparing credit card benefits are made easy here. It's very easy to locate the card that fits your needs more. Either you are looking for a Platinum credit card with the lowest Annual Percentage Rate (APR) or a credit card with reward points, you'll find it here.
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Credit Card Minimum Payments Doubling? IndexCreditCards.com Says It Ain't So
While “Credit Card Payments to Double” makes an attention-grabbing headline, the truth about upcoming changes in credit card payments is much less ominous, according to financial information site IndexCreditCards.com.
Cleveland, OH (PRWEB) December 15, 2005 -- While “Credit Card Payments to Double” makes an attention-grabbing headline, the truth about upcoming changes in credit card payments is much less ominous, according to financial information site IndexCreditCards.com.
Many media outlets have reported that come January 1, 2006, credit card customers who are currently required to pay 2% of their credit card balances monthly will have to pay 4%. According to these reports, this could mean a serious financial hit for those suddenly required to pay double.
“Fortunately, that’s rarely going to be the case,” says Justin McHenry, Research Director for IndexCreditCards.com. “While the government is requiring credit card companies to increase monthly minimum payments, the goal is to help credit card customers pay off balances without undue hardship.”
Specifically, where most credit card issuers previously required customers to pay off 2% of their outstanding balances each month, most will now require customers to pay all monthly interest and fees, plus 1% of the outstanding balance.
What does that mean for monthly payments? Significant monthly increases will occur in only the most extreme cases, those in which very large credit card debt is combined with very high interest rates. Even then, the result is not as scary as you may think.
For example, imagine a person with a $10,000 credit card debt and a 19% annual interest rate, both higher than the average consumer is carrying. Using the 2% minimum balance calculation, this person would have a required monthly payment of approximately $203.16. Under new requirements, the monthly payment would be $258.33 ($158.33 in interest, plus $100 of the outstanding balance). This is a difference of roughly $55 – on a balance and interest rate that exceeds what the average consumer is carrying. Most credit card customers will have much smaller minimum payment increases, if any.
“Unless a credit card company has specifically announced raising their minimum payment from two to four percent, it’s almost impossible to think of a realistic scenario in which payments will double,” says McHenry.
The upcoming change in minimum payments is a result of guidance from the government’s Office of the Comptroller of the Currency, which told banks they must require minimum payments that allow customers to pay off their debts in a reasonable amount of time. Under the current industry standard two percent minimum payment, customers with high balances can conceivably “meet the minimum” without even paying off a full month’s interest, much less taking a chunk out of the principal balance.
“While ‘this is for your own good’ generally should be met with skepticism,” says McHenry, “in this case it’s true.”
About IndexCreditCards.com
IndexCreditCards.com offers credit card news, research, and perhaps the most comprehensive index of credit cards available on the Internet today, with a master listing of over 600 credit cards as well as categorized lists based on interest rates, reward programs, business credit cards, student credit cards and credit cards for those with poor credit histories.
Information provided in this release may be reproduced free of charge, provided credit is given to http://www.IndexCreditCards.com.
CONTACT: Justin McHenry, 216.221.0312, e-mail protected from spam bots
WEBSITE: http://www.IndexCreditCards.com
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Low APR credit cards are on the rise
Yes, low APR credit cards are on the rise. Many credit cards are competing for your business to give you the best and lowest rates available today. There are so many credit cards from you to choose from that they are doing all kinds of things to get your attention including lowering their interest rate and giving you no annual fees.
Why is this happening? Because there are so many credit card companies. They all want your business and this is an attractive incentive to get you to apply and own one of their credit cards. If you choose a low APR credit card over one with 19.99 percent you are sure to go with the lower APR.
The only problem is that sometime these 0% and low APR credit cards are only promotional ways to get you to apply and then later your interest rate will rise. Many credit card companies have low APR credit cards for a certain amount of time such as 3 months, 6 months and some up to one year. You will have to compare to find out which one keeps the lower APR after the promotional period to ensure you are getting the best deal around.
No matter what the reason low APR credit cards are here to stay as long as the companies are competing for your business. Just remember to compare everything they offer besides the lower interest rate. You may find that several credit card companies are now offering other wonderful incentives for you to apply with them such as reward programs.
No matter which company you choose, you will enjoy the low APR credit cards even if it is only for a limited time. You will be able to save money on your purchases because you will not have to pay any interest until the promotional period is over. Just be sure your balance is very low when the interest rate kicks in and you will be fine.
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