Credit Card Minimum Payments to DOUBLE

BusinessWeek is reporting that credit card minimum payments will double to about 4% over the next year.

Tough Love for Debtors

Like a lot of Americans, Robert and Jill Proctor of Kansas City, Kan., are getting hammered by credit-card debt. When Robert lost his job two years ago, the thirtysomething couple ran up $35,000 on 10 different cards just to pay everyday expenses like groceries and gas. Even after Robert found work last year as a country club manager, their combined income just covers monthly outlays for two cars, a mortgage, and credit-card bills on top of household expenses. Says Robert, who makes minimum payments on the cards with the biggest balances as he struggles to pay off the smaller ones first: "If they tack on more charges, we'll be stuck."

That's just what's about to happen. Because of a crackdown by the Office of the Comptroller of the Currency (OCC), most banks and credit-card issuers will ratchet up required minimum monthly payments over the next 12 months or so. In the future, the payments must cover all fees and interest and pay down at least some of the outstanding borrowing.

If you don't have a plan to pay off credit-card debt, now is the time! It was probably a mistake to have minimum payment levels so low for so long, but this will still hit many consumers by surprise.

I now I have some debt that I wish I didn't, but I have been working hard over the last year or so towards paying them off. I can't wait until I can be free of credit-card debt, and start to manage my money appropriately.