Based on new regulations, credit card companies have changed the way minimum payments are calculated. This will increase the minimum payments each month. The increased payments are causing some consumers to miss payments or only make partial payments. Consolidating those credit cards and paying them off by refinancing your home may be a solution for you.
Minimum payments on credit cards are rising from the existing 2% of the outstanding balance to 4%. So, your credit card payment just doubled.
This is somewhat of a good news - bad news situation. The good news is that the government is pressuring credit card lenders to have their customers pay off their balances quicker. The bad news is this could cause a considerable cash flow hardship for many American households.
The whole basis for increasing the credit card limits is because of the amount of credit card debt that many Americans are trapped behind and how long it is taking for them to get away from the debt. Therefore, they want to try to help Americans overcome their credit card debt at a much quicker rate so that we are not always stuck behind this never ending battle called credit card debt.
If you think you will not be able to make these new minimum payments you would be well advised to take some action now. Contact the credit card holder and see if something can be worked out or look into consolidating. The worst thing that you can do is to start missing payments on the credit cards. Missing payments will result in higher interest rates and the lowering of your credit score, further reducing your options in the situation.
Once you fall behind on your credit cards, it becomes increasingly difficult to catch back up. The missed payments will also lower your credit score, and eliminate many options that you could have taken. It would be in your best interest to contact your local North Olmsted mortgage professional, and discuss a possible debt consolidation loan. They may be able to eliminate some or even all of your credit card debt, and get you back on track to meeting your financial goals.
If the new payments are to much for you to afford and you cannot refinance to pay them off then you may have to work out a payment plan with the charge card company. However they may suspend charging priveliges for the account during the pay plan period! It is still a better alternative then consumer lates showing on your credit report.