Beware Of Falling Minimum PaymentsWritten by James Dimmitt
If you opened a credit card statement recently and were pleasantly surprised to find that your minimum payment due was lowered, don’t be so quick to “jump for joy”. What may appear as a small boost to your monthly budget is actually rock that can weigh you down in debt for a lifetime.
More and more credit card companies are moving to requiring a minimum payment of 2% of your total outstanding balance. Consumer Action, a consumer advocacy group out of San Francisco, found that number of card companies with a 2% minimum payment reached 53%, up from 43% just a year ago.
Some creditors have even gone so far as to call this a “consumer friendly” move claiming it will assist consumers faced with today’s economic woes. In reality, a lower minimum payment causes you to take longer to pay off your debt to creditor while winding up paying them more money in interest payments.
For example, let’s say you have a credit card debt of $2500.00 @18% annual percentage rate (APR). Your monthly minimum payment based on a 2.5% pay back rate would be $62.50 per month. Oh and by way, here’s what credit card company really doesn’t want you to know - it will take you 20 YEARS to pay off your $2500.00 balance paying minimum monthly due. And you will have paid credit card company $3,365.51 in interest!
Identity Theft ScamsWritten by James Dimmitt
Identity Theft scams continue to flourish on web. One that you need to be aware of and beware of is any site that seems to be selling high-demand items (digital cameras for instance) at a much lower (almost unbelievable) price than you can find on other sites or manufacturer’s site.
Often victim’s are told to pay nothing until they receive merchandise. The person behind scam uses victim’s name and a credit card number belonging to another person to purchase item at a legitimate site.
Once item is shipped, victim then authorizes his credit card to be billed or sends payment directly to scammer. The scammer has now put you in position of being in receipt of stolen merchandise while they get away with your money.
Another scam that still seems to be working is being contacted through e-mail by someone claiming to be from your credit card company, your internet service provider, Paypal, or Ebay.