Comments on: Double the minimum and half the gifts? http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/ Personal finance, commentary, and spending less the easy way Wed, 17 Mar 2010 19:08:04 -0400 http://wordpress.org/?v=2.8.6 hourly 1 By: mbhunter http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/comment-page-1/#comment-350 mbhunter Wed, 30 Nov 2005 03:31:48 +0000 http://mightybargainhunter.com/?p=229#comment-350 Ahhhh ... ADD you're right. I see the point. Jaed sorry I missed the point you were making. Read your comment too quickly. Oops! Notwithstanding my oversight, if you're paying ONLY the minimum on ALL your cards, the increase in the minimum payment will mean you pay the debt off faster. It depends on how you're paying off the debt. Of course, if you never carry a balance, it doesn't matter in the slightest. Ahhhh … ADD you’re right. I see the point. Jaed sorry I missed the point you were making. Read your comment too quickly. Oops!

Notwithstanding my oversight, if you’re paying ONLY the minimum on ALL your cards, the increase in the minimum payment will mean you pay the debt off faster. It depends on how you’re paying off the debt. Of course, if you never carry a balance, it doesn’t matter in the slightest.

]]> By: Adult ADD and Money http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/comment-page-1/#comment-348 Adult ADD and Money Tue, 29 Nov 2005 22:00:51 +0000 http://mightybargainhunter.com/?p=229#comment-348 MB You missed jaed's point, his point is that if you only have a fixed amount each month to pay your debt, you will have less money to pay down the debt with the highest interest rate, costing you more money in the long run. MB

You missed jaed’s point, his point is that if you only have a fixed amount each month to pay your debt, you will have less money to pay down the debt with the highest interest rate, costing you more money in the long run.

]]> By: mbhunter http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/comment-page-1/#comment-347 mbhunter Mon, 28 Nov 2005 07:04:57 +0000 http://mightybargainhunter.com/?p=229#comment-347 Hi jaed, thanks for reading and thanks for your comment. I disagree. Higher minimum payments, as a percentage of the outstanding balance, will result in a faster debt repayment if the interest rate stays the same. Say your balance is $1,000, and you have a 12% annual rate. The interest after one month is $10. If your minimum payment is 2% of the outstanding balance, you'll have to pay at least $20, and your balance after one month (if you don't charge anything else) will be $990. If instead your minimum payment is 4% of the outstanding balance, you'll have to pay $40, and your balance will be $970. The higher minimum means you're paying more principal with each payment. If you have multiple cards, you're paying them all off faster with higher minimums. Hi jaed, thanks for reading and thanks for your comment.

I disagree. Higher minimum payments, as a percentage of the outstanding balance, will result in a faster debt repayment if the interest rate stays the same. Say your balance is $1,000, and you have a 12% annual rate. The interest after one month is $10. If your minimum payment is 2% of the outstanding balance, you’ll have to pay at least $20, and your balance after one month (if you don’t charge anything else) will be $990. If instead your minimum payment is 4% of the outstanding balance, you’ll have to pay $40, and your balance will be $970. The higher minimum means you’re paying more principal with each payment.

If you have multiple cards, you’re paying them all off faster with higher minimums.

]]> By: jaed http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/comment-page-1/#comment-346 jaed Mon, 28 Nov 2005 06:40:40 +0000 http://mightybargainhunter.com/?p=229#comment-346 <i>The higher minimums mean that you get out of debt faster!</i> Er, no. Higher minimum payments are either neutral (if you have only one card you're paying on, or if the interest rate on all your cards is equal) or make repayment take longer (in the more common situation where you're paying cards with differing interest rates). The fastest repayment strategy is to pay the minimum on lower-rate cards and as much as you can on the highest-rate card. If the minimum on the lower-rate cards goes up, you have less money to pay down the highest-rate card. You will take more, not less time to pay off your cards with this new regulation. The higher minimums mean that you get out of debt faster!

Er, no. Higher minimum payments are either neutral (if you have only one card you’re paying on, or if the interest rate on all your cards is equal) or make repayment take longer (in the more common situation where you’re paying cards with differing interest rates).

The fastest repayment strategy is to pay the minimum on lower-rate cards and as much as you can on the highest-rate card. If the minimum on the lower-rate cards goes up, you have less money to pay down the highest-rate card. You will take more, not less time to pay off your cards with this new regulation.

]]> By: mbhunter http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/comment-page-1/#comment-340 mbhunter Sun, 27 Nov 2005 04:28:17 +0000 http://mightybargainhunter.com/?p=229#comment-340 Thanks for your comments. Average John's situation's a bit sad. Sixty-two years old and struggling with credit card debt. On the face of it he seems to be needing help with his finances but it's hard to give it to him if he's already in the victim mindset. Thanks for your comments. Average John’s situation’s a bit sad. Sixty-two years old and struggling with credit card debt. On the face of it he seems to be needing help with his finances but it’s hard to give it to him if he’s already in the victim mindset.

]]> By: Kassy http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/comment-page-1/#comment-337 Kassy Sat, 26 Nov 2005 21:14:46 +0000 http://mightybargainhunter.com/?p=229#comment-337 I wanted to comment on Average John's blog too, but couldn't so I'll comment here: Good luck with writing the letters. My boyfriend tried that with W. Fargo since he's been out of work for a year, he tried explaining how he had no income and no one to borrow from. CCCS wanted him to pay a monthly fee which of course he can't. The upshot was that W. Fargo wasnt interested, they still want their 800 to make the account current before they will consider any kind of debt repayment plan. I'm not sure what my bfriend can do if W. Fargo isn't willing to work with him before the account becomes current. Anyway, I wish you luck in your endeavors. I wanted to comment on Average John’s blog too, but couldn’t so I’ll comment here:
Good luck with writing the letters. My boyfriend tried that with W. Fargo since he’s been out of work for a year, he tried explaining how he had no income and no one to borrow from. CCCS wanted him to pay a monthly fee which of course he can’t. The upshot was that W. Fargo wasnt interested, they still want their 800 to make the account current before they will consider any kind of debt repayment plan. I’m not sure what my bfriend can do if W. Fargo isn’t willing to work with him before the account becomes current. Anyway, I wish you luck in your endeavors.

]]> By: Adult ADD Money http://www.mightybargainhunter.com/2005/11/26/double-the-minimum-and-half-the-gifts/comment-page-1/#comment-336 Adult ADD Money Sat, 26 Nov 2005 21:03:45 +0000 http://mightybargainhunter.com/?p=229#comment-336 I wasted five minutes reading Average John's blog that I will never get back. He sites statistics that are at best questionable and I noted a couple of math errors when he tried to calculate the change in the minimum payment on the average US household Credit Card debt. I wasted five minutes reading Average John’s blog that I will never get back. He sites statistics that are at best questionable and I noted a couple of math errors when he tried to calculate the change in the minimum payment on the average US household Credit Card debt.

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