Tuesday, January 03, 2006

Musings 94--Credit Card payments to double

Welcome to 2006! For most of us this will be a watershed year. You know what a watershed is, don't you? It is a kind of thing that if you live through, you will become stronger. If you don't, you drown. Yea!

The credit card companies have been pressured by the government to raise their minimum payment amount from 2% to 4% of the unpaid balance. Basically, your payment just doubled. If you were living hand to mouth, then, you are now going to go hungry. (See Link)

If you have a $10,000 balance on your credit card and have been paying 2% or $200 per month, you will now may be paying $400--that is 4%. Now I have not heard a peep out of the news media on this, but it is true and if you are carrying credit card balances; then, get ready to take the hit.

The good news is that you pay down your debt faster and save on interest. The bad news is that it will kick the shit out of your budget. There is not much you can do except tighten your belt and get on with life. This is the government way of reducing debt. Maybe I should say the Bushie way of reducing debt. Plus, the credit card companies changed the bankruptcy laws so that most of us can't get rid of our unsecured debt. You see, they knew that there are a lot of folks who live from paycheck to paycheck. They, meaning the credit card companies, did not want to get caught out on a limb so they got the bankrupt law changed in 2005 so they can kick the consumer in the privates in 2006.

Have a happy new year. It is just beginning.


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