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One of the biggest credit card issues right now is the fact that Chase is raising minimum payments. For many people, this means that their minimum payment just became unaffordable. Double and triple minimum payments are common, and this is causing financial hardship. In order to keep the old 2% minimum payment, customers have to agree to a higher interest rate. Which means Chase gets more money — and customers are repaying for longer.
Sadly, the options open to you when you have this problem are rather limited, and there are pitfall attached to them:
- Apply for a new credit card and transfer the balance. While a 0% credit card offer is hard to come by, they still do exist if you have good credit. Additionally, there are offers for 2.99% intro rates as well. You can try to get one of these cards and do a balance transfer, but in many cases these are harder to get than 18 months ago.
- Pay off the credit card. You can pay off the credit card, or you can close the account and pay off the card under your old terms. Most people, though, can’t afford to pay off the card in full. And closing the account while you are still making payments can be damaging to your credit score.
- Bankruptcy or debt settlement. There has been some talk of bankruptcy by some who are in this position. Another option is debt settlement. However, both of these options are extremely damaging to your credit score. They should be last-ditch efforts to salvage a bad financial situation.
Unfortunately, a lot of the alternatives to paying the increased minimum or agreeing to a higher interest rate are not feasible for most people. This means more belt-tightening as they try to make higher payments. It’s not really fair of Chase, but credit card have never played fair.
