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If you're an American, your minimum monthly credit card payment may soon be doubling. If you're only paying the minimums now, you'll have to be careful to adjust your budgeting to pay more.

Who's Raising Your Monthly Minimum Credit Card Payment?

• Whose idea was it to increase credit card minimum monthly payments? The

  Office of the Comptroller of the Currency, a bureau of the U.S. Treasury

  Department that has become more and more involved with reigning in the abuses

  of credit card companies. Yes, this credit card minimum payment increase was

  thought up by people trying to help you.

• Who will be raising their monthly minimums? So far, some of the largest

  credit card issuers have agreed to the new standards. Bank of America has

  already been asking for the higher monthly minimum payment. MBNA, Citigroup

  (a.k.a. Citibank), Discover, and Chase (on some of its cards) will be breaking

  the news to their cardholders as Fall 2005 progresses.

How Much Will Credit Card Minimums Increase?For many credit cards, such as MBNA and Bank of America, the new rates mean that monthly minimum payments will double.

• Right now, the monthly minimum payment is only 2% of the balance on most

  of these cards. The new rate will be around 4% (the actual number may vary

  from card issuer to card issuer). This means that if you have the average

  American credit card balance of about $10,000, your minimum monthly payment

  will go from $200/month to $400/month.

• Of course, if you have any additional fees, whether a late fee or a cash

  advance fee or any of the other fees that the credit card guys cook up, you

  will have to pay that, too.

Why the Credit Card Minimum Payment Increase?You may be wondering why anyone would want to make you pay a higher minimum monthly payment. The basic reason for making you pay more is: for your own good.According to Mike Peterson, co-founder of American Credit Foundation, by doubling the amount you pay per month toward credit card debt, you will cut down on what you pay toward interest by much more. Look:

• Old monthly minimum payment of 2% of balance, $2,000 credit card debt at

  18% percent interest:

• Time to pay off debt in full: about 30 years.
• Interest paid: about $5,000–two and a half times what you initially

  borrowed!

• New monthly minimum payment of 4% of balance, same debt:
• Time to pay off debt in full: about 10 years. Time saved vs. old payment:

  20 years.

• Interest paid: about $1,100–slightly more than half what you originally

  borrowed. Amount saved vs. old payment: $3,900.

Tips for Paying Double Easily

How do you pay off your new, higher credit card balance?
Stop Charging.
Yes, you will have to make major sacrifices to stop using your credit card. But just look at all the money you'll have in ten or thirty years that you wouldn't have if you had to pay all that credit card interest. If you have trouble resisting the temptation to charge, here are some solutions that have actually worked:

• Give your credit cards to a friend or family member to hold in safe

  keeping.

• Freeze the cards in a block of ice.
• Never carry more than one credit card with you.

Economize on the Small ThingsAccording to Michael Peterson of the American Credit Foundation, even tiny savings really add up when it comes to debt. His favorite example is the Diet Coke example:

• If you buy one Diet Coke a day at $1/day, that's $365/year.
• If you instead invested that one dollar a day at 10% interest (the average

  yearly return on major stocks over the last half century), you would be a

  millionaire within 56 years.

• Of course, with credit cards, this logic works in reverse: if you are

  lucky enough to be paying only 10% interest, fifty years of charging Diet Coke

  to your credit card will mean you've lost the same amount, not only in

  interest paid, but in the lost opportunity to save and invest.

• You don't have to put aside one dollar a day for fifty years to see a big

  difference. One dollar a day is $30/month, 15% of the average $200 increase in

  credit card minimum monthly payments.

• In order to get that entire $200 increase out of your daily budget, you

  would only have to save $200/30 or less than $7 a day. OK, maybe you aren't

  drinking seven Diet Cokes at one dollar each a day. But there are very few

  credit-card-holding Americans who can't cut $7 a day out of their

  spending.

• Put another way, $200/month works out to about $45/week, or the cost of a

  restaurant meal for a small family–another luxury you might want to skip until

  you're debt-free.

Bigger Savings

• Taxes. Most Americans could pay hundreds of dollars less tax each year if

  they just took all the deductions they were eligible for upfront, rather than

  waiting to get a refund in April. By April, you will have spent a big chunk of

  money on interest on debt that you wouldn't have spent if you'd had the money

  at hand.

• Call the credit card companies and ask if they can allow you to set up a

  payment plan, or at least provide a brief extension. Simply calling and

  letting them know you haven't forgotten about them can help keep you out of

  the worst trouble.

• Credit counseling. Credit counselors can talk with credit card issuers to

  help you get a repayment plan you can keep up with. They can also open your

  eyes to untapped sources of income you never knew you had, like kicking the

  $1,000,000 Diet Coke habit.

In short, don't panic. With only a little bit of planning, you can make the higher minimum monthly payment work to your advantage, just as the policy's authors intended.

Joel Walsh has written more articles on credit card debt counseling: http://www.debtguru.com

Article Source: http://EzineArticles.com/?expert=Joel_Walsh

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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.