Thursday, October 08, 2009

Relevant News

Somewhere in the past couple of days I saw a story about a guy whose minimum payment on a credit card went from about $300 to something like $900.

My immediate reaction: damn, what does he owe?

I got a bill on a Visa card today. I owe something like $350. That would normally result in a $10 or $15 minimum payment, not a problem as I pay as I go. Today, the minimum payment was a bit over $60, a four to six fold increase.

I'm thinking there's a lot of bill shock hitting installment payment America about now.

A friend of mine who has perfect credit got a notice from an unnamed bank a month or so ago telling him they'd cut his credit limit by something like half. He was of course a poor client because, like me, he paid what he owed each month. His reaction was to cancel his card.

If you increase the minimum by that much and cut the limits like they are doing, aren't you foregoing a lot of interest? I suppose I should look at the legislation or read some news reports to find out why the banks are getting rid of an income source. And if they increase the minimum to the extent they are and cut the limits, aren't they guaranteed a bunch of defaults? I wish I understood finance.

Is there another financial meltdown on its way that I don't understand?

1 comment:

fermicat said...

I think that some new credit card law is about to kick in and they are all changing stuff in advance. Too lazy to look it up right now, but I've been seeing some of this in emails from Consumer Reports.