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Structured Settlements Are Payments Made To An Injured Consumer By The Insurance Company From Where The Person Has Bought His Policy. In Other Words, The Person Is Prohibited From Receiving Payments In One Lump Sum. Welcome To SettlementInfo.net. As
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Minimum Credit Card Payments to Rise
Author: Charles Essmeier
For years, major credit card companies have allowed cardholders to make minimum payments of 2% of the outstanding balances on their credit cards. Having customers pay the minimum doesn’t reduce the balance by very much, but when the 18-30% interest rates that many credit cards charge is applied, the result is a profitable ones for the banks that issue credit cards. A balance of $1000 can take nine years to pay off at 20% interest if the borrower only pays the minimum due each month.
Clearly, it is not in the best interests of consumers to pay the minimum every month. But tens of thousands of Americans do just that, carrying huge balances and paying the minimum every month. The average household now carries $10,000 in credit card debt; for many people, paying the minimum is all they can manage. Due to changes in Federal law, several major credit card issuing banks will soon raise the minimum amount due to 4%. This might seem like a small increase, but if you are already deep in debt and paying the minimum amount, this could cause your payments to double. If you have a $10,000 balance and you are paying $200 per month, you will soon need to come up with $400 instead. Many people will find this impossible to do, as they are already paying as much as they can. What solutions are available?
The usual common sense rules of credit card use apply here. Stop using your credit cards. See if you can consolidate your debt on another credit card with lower interest. See if you can cut out some unnecessary expenses in order to free up some more money to pay your balance. Consider a home equity loan to consolidate your debt. Call your card issuing bank and see if they can work out repayment plan or lower your interest rate. There are numerous solutions available, but card holders need to be aware that the minimum payment is rising, and it isn’t going to come back down. By charging a 4% minimum, the credit card issuing banks are hoping that consumers will pay off their debt a bit sooner and that fewer consumers will find themselves in a situation where filing for bankruptcy is the only solution. And once October comes around, even filing for bankruptcy will be more difficult. Credit card holders with large balances on their accounts should give considerable thought to reducing their debt now, as payment options and requirements are going to be more strict from now on.
About the Author
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation and credit counseling, and StructuredSettlementHelp.com, a site devoted to information regarding structured settlements.
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A Quick Note
From The Publisher...
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Structured Settlements Offer Advantages over Lump-Sum Payments |
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A structured settlement, which offers injury victims cash payments through a long-term annuity as compensation for their damages and medical expenses, offer a number of possible advantages over payment in a lump sum. While the lump sum payment is the traditional way for responsible parties to pay accident claims, the structured settlement offers payments over the span of an agreed-upon period of time. This length of time may span from several years up to the remainder of the life of the injured party, depending on the severity of the accident, the amount of money involved, and the agreement reached between the two parties. Depending on the specific circumstances of the case, structured settlements can have numerous advantages over a lump-sum payment: They are tax free. Thanks to a 1982 change in the Federal tax code, payments on a structured settlement are free of state and Federal taxes. The paying party funds the settlement through the purchase of an annuity which earns the... |
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