Received a notice this week. The Chase account we have at 3.9% interest (no expiration), which was used to buy appliances will have the minimum payment increase from 2 to 5 percent. This increases the monthly minimum by ~300 bucks per month. I should thank them for helping me be debt free a quicker, but I still have some thoughts.
First, I fully understand why. Banks make money off the gap or spread of interest on the money they take in (low), versus the money they lend out (high). Considering overhead, loan loss reserve, and risk; they not making much, if any, of this account.
SO...
Jack the minimum payments up. Hopefully, the person can't make the payment, meaning late fees and a higher default rate. Profit.
Additionally, it seems that a lot of banks are now doing this. Companies that took taxpayer funded bailout funds. They are effectively raising payment amounts, which take money out of the economy.
So, I'm glad that I have ample cash flow to pay this. Of course it is stupid to carry balances on cards at all, but 3.9 for the life of the balance was a good deal, so we went for it. I feel bad for folks who struggle paying debts who face this.
Hoarding cash. I'm sure I am not alone. Exactly the action that will not help the economy right now. I will drive my eight year old truck until it dies, hold off on any durable goods purchases, and continue to add to my cash savings until things recover.
It's all under the mattress in the guest room. :-)
the end of the tunnel
50 minutes ago
10 comments:
amen sister!! you are not alone. i have a 9 year old jalopy and my washer just died, but i had a spare in the storage unit, we tried to sell it last year but nobody wanted to pay what i was asking, their bad, because i have a great set now.
we have been pinching every penny we get and have a garden right now to help with the grocery bill.
we have been trying to build up a nine month emergency fund, not easy but we do what we can, we pay off all credit cards every month. they make 0 dollars from us. good for you keep hording your money!!
I don't even think that system can be fixed, its such a machine. Its like you can't touch them, they do whatever they want and no one has any recourse. I stopped using credit cards 3 years ago, just enough to pay the balance every month. They hate me. I had a choice between a new car and my really awesome 1999 Aurora that I had the money to buy without financing. Getting a government voucher for $500 more than I paid for it is tempting though. But, um, nope!
I no longer use credit cards. I refuse - I have paid off all banaces and refuse buy anything if I cannot afford it in cash payments...
It was a ahrd lesson to learn but it is liberating once you figure it out.
I use credit cards but the balance is paid off each month. I am very disciplined about that.
I am hoarding money too. I don't use my credit cards, in fact I cancelled all of them except one, just in case of an emergency. You never know what will come your way.
Don't know if you remember my post a few days back..my father taught me if I couldn't pay cash, I couldn't have it. It has worked for everything but our house!
All good comments on responsible spending. It still annoys me that companies that sought out and took taxpayer money now turn around and try to screw the same taxpayer they took bailout funds from.
I use a credit card for everything...and earn miles for flying. I pay the balance every month, so it's not a debt thing, but I feel like I get something for nothing...and I like that!
And I don't give them one single day...if the payment is due on Sunday, I pay it electronically on SUNDAY! Makes me feel like I'm putting one over on them.
...in the guest room, you say???
I will be visiting soon...
=)
e.e.
i paid off my credit cards exactly 1 week before I lost my job. I carried little debt but one had a substantial balance because I got stupid. I cut them up and now if I need to use one...I use my the one my husband pays and not the one I used to pay (geez, it only took me 24 years to figure this out)...LOL
Kare
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