Credit Card Minimums Increase

The Chicago Sun-Times reports:

Banks largely waited to respond to the guidelines, which were issued in January 2003. That means millions of people are being hit with higher credit card bills this holiday season, just as energy bills are soaring and a new bankruptcy law has made it harder to erase debt.

"It's the consumer's triple-witching hour,'' said Catherine Williams, vice president for financial literacy for the Consumer Credit Counseling Services of Greater Chicago.

"It's quite simply disappointing that banks have waited and have not increased the minimum gradually but are doing it during the holidays,'' says Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

Jerome Lamet, a Chicago bankruptcy attorney who co-founded Lawyers United for Debt Relief, said the timing of the increases favors banks because it comes after the bankruptcy law made it much harder to wipe out credit card debts.

"This is all coordinated with the passage of the new bankruptcy act,'' he said. Most won't be able to pay. "The average American was struggling to pay the 2 percent minimum every month. Suddenly they have to pay 4 percent. Those people aren't going to be able to make it.''

This might mean a little less leverage for those on interest only mortgages.We'd be suprised if some communities aren't affected by this time next year.