feds want to double your credit card minimum payments

(I-Newswire) November 2, 2005 - The FEDS are planning to require all credit card companies to double your current minumum credit card payments. This is an action that they hope will reduce the national household debt by requiring more towards pay back every month on those outstanding balances carried by most U.S. households.
Many credit card companies currently have thier customers paying only 2% of the balance each month; or what calculates to a 40-50 year loan. Of course, that is also based on paying only the minimum payment each month and never adding to your current balance. (How realistic is that?)
Many times the entire payment is only paying a few dollars to principal and the rest towards interest. The credit card companies really hope that you will never pay off your balance! Why not have you as a customer for life?
So, there is merit to what the FEDS would like to do in order to reduce some of the national debt out there. After all...doesn't everyone want to eliminate their debt?
The problem that exist is that many consumers will not be able to afford the increased payments! Many have seen their credit payments rising already due to prime rate increases. Most credit card bills are based on a margin added to the prime rate. Many cards are already at 29% interest rates and even higher! The FEDS promise to keep increasing the prime rate with no end in sight!
Such a coincidence that this ruling comes just as the bankruptcy laws have just tightened up.
One area where consumers are rich, is in home equity. With all of the tremendous appreciation that most U.S. home owners have seen over the past few years, it may be time to tap into this resource. We, at FloridaLoan.net, have already seen an increase on refinance requests in this 4th quarter of 2005. For those with equity, this would be the time to catch the equity of your home at it's peak before the inevitable slide down to a home value plateau. For home owners it is also a chance to catch the last of the lower mortgage rates as they once again drift up-ward as they have been doing.
Many experts see this trend of rising rates as a five to six year cycle that may take us back up to those 10% 30 year mortgage rates again (or higher).
Look for rising credit card rates, rising mortgage rates, rising credit card payments, adjustible morgage rates adjusting to much higher payments and home prices settling into a plateau after some back slide. Don't forget; that BK back door exit has just had a new lock put on it.
What will this mean to you? Just like putting up hurricane shutters before the storm...it's time for you to financially prepare for the financial changes in your world.


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