Thread: How is minimum credit card payment calculated?

It depends from Credit Card to Credit Card. Banks have different ways of calculating the minimum payment.

Some credit card issuers only set the interest as the minimum ((open balance /100)*(APR/12))open balance). Some say interest + 1% of balance and some just go by 1% up to 5% of the entire balance.

If you hardly can afford paying the minimum you probably have an issue. You may be able to lower your APR however since you have trouble paying the minimum and the bank knows how much you spend they probably won't lower it. Than you would have to look into Consolidation service which may be the smartest thing. May I ask you how much you approx. owe in credit cards ? How much is your APR ?

I have a little over $24,000 in debt on my cards.

I have two Bank of America cards that have the bulk of the balance on them. No matter what I say or do they won't work with me at all. I want to be able to keep paying them but I need them to lower the rate so I can pay my balances. The interest rates are over 20% and they had doubled them out of the blue and that is what really hurt me.

I have heard a number of things about Bank of America doing this to people even in the mainstream media. They are the biggest but they also seem to be the most unfair.

Originally Posted by indianamom

I have a little over $24,000 in debt on my cards.

I have two Bank of America cards that have the bulk of the balance on them. No matter what I say or do they won't work with me at all. I want to be able to keep paying them but I need them to lower the rate so I can pay my balances. The interest rates are over 20% and they had doubled them out of the blue and that is what really hurt me.

I have heard a number of things about Bank of America doing this to people even in the mainstream media. They are the biggest but they also seem to be the most unfair.

Background info.... the reason banks jack up the interest rate is this, you are a high risk (justification, righht?)... BUT the reason behind is this... when banks jack up interest rates to borrower who can barely make min payments... the balance grows fast!!! (rule of 72) Why is this good for the bank? Bigger write offs... all they do is discount your defaulted loan and sell them to a 3rd party collection agency for pennies on the dollar. Then the collection agency will try to collect the full amount. (more to it then that...)

Ok now for BOFA... the reason they bumped up the interest rates is... 1/3 of your FICO is based on available credit to balance ratio... if you have high balances on your card... then you have a high ratio... which means... your fico will go down. When the FICO goes down the bank all ways has the right to jack up the interest rate.

Keep in mind credit card is an unsecured debt... techinally they cannot come after you. They may put a judgment against you (the collection agency) if you have assets. If not, how do you squeeze blood out of a turnip? You cant...