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FOR IMMEDIATE RELEASE CONTACT: Maureen O'Hara
248/553-5400 x 456
NATIONAL BANKS DOUBLE MONTHLY MINIMUM CREDIT CARD PAYMENTS
Farmington Hills, Mich. August 19, 2005 ? National banks are doubling minimum monthly payments on credit card balances, but credit counseling clients on a Debt Management Program have nothing to fear. Their payments will not increase.
Credit card payments for consumers on GreenPath's Debt Management Program will now be about half of the minimum payment required on most credit card accounts. "Debt management programs are now much more attractive to consumers because they offer significantly more value," explained Jane McNamara, president and CEO at GreenPath Debt Solutions. "Credit counseling agencies can now help consumers lower their monthly payments by as much as 50 percent. That's huge for someone on a tight budget."
Banks such as MBNA, Bank of America, JP Morgan Chase and Citibank are among those who are increasing their minimum payment amount. Others are expected to follow suit.
Previously, consumers could pay the minimum amount and still continue to spend. However, doing this barely covered the interest and left little to be applied to the balance, thus continuing the cycle of debt and forcing the government to take notice. After pressure from the Office of the Comptroller of Currency, banks agreed to increase their minimum payment amount.
Increasing the minimum payment percentage will help consumers get out of debt more quickly. While this will create a positive situation in the long-term, consumers may be hard-pressed to pay their bills in the short-term. For the average American who carries approximately $10,000 in credit card debt, the increase could create even more financial stress. Instead of a 2 percent payment of $200 each month, the minimum amount will now be $400.
Credit counselor Bettina Pearch says GreenPath clients aren't worried about the increase, but those who have yet to seek professional help are uneasy about the change. "People are panicking because they look at the bottom-line ? what they will have to pay a month to accommodate this new increase." Creating a surplus in a tight budget is difficult, she says, but the majority of people are going to be saving a lot in the long-run.
Established in 1961, GreenPath Debt Solutions is also known as Consumer Credit Counseling Service. The non-profit company provides free counseling, customer-focused debt management solutions and financial education programs designed to help people enjoy a better quality of life. GreenPath has 24 offices located throughout Michigan and 12 in states such as N.Y. and Ind. To learn more about GreenPath, please call 866-648-8122.### | |