Credit
Ask Jean Thursday: A Bright Side to the Hike in Your Monthly Minimum
Posted by Jean
To SheSelz…who wrote:
I also am a customer of Chase. I have never paid late in 30yr. They have just raised my monthly minimum payment from 2% per month to 5% per month, an increase of 250%. My interest rate is fixed at 3.9%. After reading the previous blogs, I’m not sure if I should call them or not! Does anyone else have other reports on how they have been treated on this type of problem? Is this problem only been occurring with Chase or other banks as well. Obviously they found the loophole that I missed in all the fine print!
Before you resort to calling — and we’ll talk about that in a moment — I want you to try to think of this as a gift rather than a punishment (and I know it feels like a punishment, with a credit card this cheap, the temptation is to use it for all expenses you have to carry.) But let’s say you have $10,000 in debt on that card. If you pay it off at 2 percent a month — at the 3.9% interest rate without charging anything else — it’ll take you 55 months. BUT if you can come up with the $500 it takes to pay the 5 percent a month, you’ll get out in 21 months. And save a boatload of interest in the process.
What if you can’t? What if it’s impossible to come up with that $500 a month? You simply don’t have the cash and you don’t have a way to get it? Then you call and you tell them that and try to negotiate something in between. Understand, they may cancel your card as a result (that’s their prerogative) or only be willing to cut the minimum so far or say no. But it’s better for your long term financial health if you can rob from the various Peters in your life to pay this particular Paul.
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I had the same thing happen, but the minimum payment is going to $1800 fom $700. I can’t possibly come up with that. I tried calling, the # for the Special Services Dept is 18778902941, and expect to get disconnected half a dozen times before you finally talk to someone. The woman I talked to said I could work out a plan to pay $800 a month, have it all paid off in 5 years, it would have to be electronic transfer directly from my checking, and of course my card would be cancelled. Then she asked some questionsabout my income and other debt, and told me she thought I could make the $1800 payment easily. I don’t earn that much on a paycheck! I talked to a debt management program last month, but at the time I thought I was better off trying it on my own, then this happened, and also another card went from 6.99% fixed to 17.99% variable.I also called them, but they said the interest rate was non negotiable. The first months interest on that one is going to put me over limit, so while I would rather pay my bills the way I agreed to when I got the credit (and after all, the credit card companies sent me the offers, not the other way around), I just don’t see any other way out now. It doesn’t make any sense that these credit companies would put people who have been paying their bills on time into these impossible situations. After talking to the credit councilor last month, I was feeling optimistic about getting this under control on my own, but it just isn’t going to happen.
I’m in the same boat with Chase. I simply can not come up with an extra $500 a month. I’ve been debating on calling them directly to try to work it out or going to a credit counselor. I’m not sure which is the best option. I’m not sure if they’ll work with me unless I become deliquent first, which I really don’t want to do.
I contacted Chase two days ago and they told me that it was a mistake that my account had gone from 2% to a 5% increase and the representative corrected it right there on the spot. I confirmed later that day on the website and it had been changed back to 2%. I was rather shocked that they corrected this so quickly and I am very sorry to read about other people who do have to pay the additional 5%. If I were in their boat, I would definitely look into a balance transfer offer, but beware of the fine print and good luck!