is there anyone here upset and worried that they may have a harder time paying there credit cards, now that the goverment is making the credit card companys raise your minimum paymet, I mean I always pay more then my mimimum, but man this may hurt they hell out of people bigtime, I mean what if people can't pay the extra money, I think in a way it's good to help people, but I also think is really wrong for people bigtime. I mean that why it's called credit. WOW this is killer.
A new credit card law aimed at helping consumers get out of debt went into affect on January first. The law is designed to keep credit card companies from making too much money and it will also help those in debt get rid of it quicker.
Recent college grad, James Walsh says he sometimes leaves a balance on his credit card. "I try not to but its not always possible, I just got our of college so I'm trying to work around everything."
And with 7 million Americans only paying the minimum amount on their credit cards, Walsh is not alone. In fact, credit card companies made about 30-billion dollars in 2004... all from interest charges.
"Credit cards want you to stay in debt as long as possible, that's the way that make their money. So as soon as you can get out from under their clutches, out from under the hammer the better off you're going to be,” says Financial expert Carl Williams.
This year will be different, a new law now requires consumers to pay the interest and penalties on their bills plus at least one percent of the principal, something that Williams says will initially hurt some people who could be paying 50 bucks more a month.
"So its going to be tight, if people are making minimum payments anyway, its going to make for tighter payments, especially with higher heating costs and Christmas just over there's going to be credit card bills from big department stores."
But, in the long run, those in debt will get out quicker.
Williams says, "Lets say you have you have $9,200 in debt and you're just making minimum payments its going to take you about 15 years to pay that off."
But, pay an additional one percent... and you could get out of your debt in about 2.5 years and save $7,500 in interest.
Walsh says when he can, he already pays more than the minimum amount. "I usually pay, I try to pay as much as I can each month. I don't even look at the minimum, I look at what's in my check book and see how much I can afford to pay off and that's what I do."
The average consumer has about $9,200 in credit card debt, so the government is hoping the new law will help trim that... and prevent others from going into debt.
A new credit card law aimed at helping consumers get out of debt went into affect on January first. The law is designed to keep credit card companies from making too much money and it will also help those in debt get rid of it quicker.
Recent college grad, James Walsh says he sometimes leaves a balance on his credit card. "I try not to but its not always possible, I just got our of college so I'm trying to work around everything."
And with 7 million Americans only paying the minimum amount on their credit cards, Walsh is not alone. In fact, credit card companies made about 30-billion dollars in 2004... all from interest charges.
"Credit cards want you to stay in debt as long as possible, that's the way that make their money. So as soon as you can get out from under their clutches, out from under the hammer the better off you're going to be,” says Financial expert Carl Williams.
This year will be different, a new law now requires consumers to pay the interest and penalties on their bills plus at least one percent of the principal, something that Williams says will initially hurt some people who could be paying 50 bucks more a month.
"So its going to be tight, if people are making minimum payments anyway, its going to make for tighter payments, especially with higher heating costs and Christmas just over there's going to be credit card bills from big department stores."
But, in the long run, those in debt will get out quicker.
Williams says, "Lets say you have you have $9,200 in debt and you're just making minimum payments its going to take you about 15 years to pay that off."
But, pay an additional one percent... and you could get out of your debt in about 2.5 years and save $7,500 in interest.
Walsh says when he can, he already pays more than the minimum amount. "I usually pay, I try to pay as much as I can each month. I don't even look at the minimum, I look at what's in my check book and see how much I can afford to pay off and that's what I do."
The average consumer has about $9,200 in credit card debt, so the government is hoping the new law will help trim that... and prevent others from going into debt.
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