Friday, November 04, 2005

Credit Card Companies Raise Minimum Payments

Click here for audio story.

It is a good thing that credit card companies have decided to raise minimum payments. They have been trying to find ways to reduce minimum payments so that you can stay in debt to infinity. A new Citibank card, for instance, lets you skip a monthly payment so long as you charge at least one item per month. Can you believe that?

I've become a fan of the Dave Ramsey approach to debt. The approach is to not have any. Pay for what you need in cash. The only plastic you need is a debit card. Just pay off everything you owe. So, I am working on that as much as I can now. By raising the minimum payment, credit card companies are giving debtors a way out of the hole in which they are. Of course, it doesn't address the real problem, overspending. This doesn't mean spending more than you thought you would. Overspending means spending more money than you make. I am a financial sinner, but have seen the light. Credit cards will not be a part of my future. I will use the money save in finance charges to invest in my future.

If you are one of those affected by the raise in minimum payments, be glad. You should also not put any more stuff on credit. Stop it. Bad shopper.
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