Question
What exactly does the new credit card minimum payment law say?
Some articles say 1% of balance per month...others 4%?...is it being phased in? when? how? It seems the guidelines are virtually a rule or law that banks must adhere to... I have no credit card debt. I am interested in the US economy. 2 major banks said this issue will hurt their earnings in the 3rd and 4th quarter. At least one other major bank increased minimum payments this quarter. One author said these changes would be a big drag on consumer spending and the US economy this year.
3 years ago - 2 answers
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The new minimum payment rules are not a law, they are just a guideline issued by the Office of the Comptroller of the Currency (OCC) which is the part of the US Federal Government that is responsible for regulating the credit cards industry. Although I don't know exactly what the rules say word for word, any minimum payment on a credit card should now be at least 1% of the balance plus any fees (such as late fees, ATM fees, or over-the-credit-line fees) and any finance charges (interest). Many credit card companies, however, have set their payments somewhat higher than this minimum requirement. It also depends on whether it's a personal card or a business card. Citi Cards commercial account minimum payments are now 3% of the balance plus fees & finance charges. It's important to realize that if your account is current and you don't have a lot of late fees or ATM charges, then your minimum payment won't be going up very much at all. Also, the new rules impact people who only pay the absolute minimum each month. If you already pay more than the minimum, you probably won't notice a difference at all. It's up to the credit card company as to when the new payments will start, but I believe the "grace period" is up some time this year. Your credit card company will send you (or has already sent) a "change in terms" notification letter either in with your statement or in a separate envelope. If you're not sure if you're on the new payment terms yet, call your card company and ask.
by fetherlan
3 years ago
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Other Answers
Minimum payments will rise from an average of 2% of the outstanding balance to 4% of the outstanding balance. Good news is you get out of debt faster, bad news is it pinches the paycheck. Minimums go up just when it becomes harder to file for bakruptcy - thanks to The Man for sticking it to the rest of us.
by northfulton39- 3 years ago