Monday, September 26, 2005

Credit Card Minimum Increasing in Oct.


From  SanDiegoReader.com

Next month, people who have held a credit card for some time should get a surprise: each month, they will have to pay 4 percent of the outstanding balance on the card, not 2 percent. This move was dictated by the federal government's comptroller of the currency in 2003. The phase-in for new customers began in the summer, and October is the big month for existing customers. It's not small change. Almost 40 percent of credit-card holders pay only the minimum balance, according to Cardweb.com.

The average household credit-card balance is around $9000, according to Boston's Babson Capital. Previously, families paid a minimum of $180 a month. Now, they will have to pay $360 each month.

With gas at $3.00 per gallon and the credit card minimum increasing in October, Christmas could be a very interesting time for the consumer this year.  Look for increased refinancings and home equity extraction next month as consumers tap their home ATMs to compensate.

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