Paying Off Credit Card Debt Cheap? Watch Your Minimum Monthly Payment Rates!

Credit card holders burdened with large debts are always on the lookout for a great deal which could help them pay off their debts slowly but surely. This is especially true for credit card holders who have a limited budget but still want to pay off their debts.

So when offers giving these credit card holders a chance to pay off their high interest rate debts through a loan with a relatively low interest rate percentage come, they can hardly say no. The deal gets even sweeter when they find out that the interest rates were guaranteed to stay the same for the lifetime of the loan.

Programs such as this were regularly offered by major credit card companies such as Chase Card Services. Because of the appeal of the program, thousands of credit card holders quickly paid off their balances with these low interest loans, many of whom planned to pay off their debts slowly but surely by paying only the minimum monthly amount required.

Credit card holders who enrolled in such a program recently found themselves facing a very unpleasant surprise from their credit companies. Although the credit card companies guarantee that the interest rate of their debts will stay the same for the lifetime of the loan, the minimum monthly payment rates are not under a similar guarantee. Now, these credit card holders are finding out that their monthly minimum payment rates have substantially increased. Whereas the average rate was at around 2% before, credit card companies are now raising this rate to around 5%.

Because of the change in minimum monthly rates, credit card holders are finding out that they need to pay several times more than what they are used to every month. This is especially troublesome for credit card holders living on a fixed budget. The increase in minimum monthly payments are completely destroying the budget of these credit card holders and many of them are facing the prospect of defaulting on their debts.

Credit card holders do have the option to call up their credit companies and try to opt out of the change. However, the credit card companies have not been very flexible on the issue. Most customers that request to opt out of the change are denied. Some are allowed to retain their old minimum monthly payment rates in exchange for an increase in the interest rate of the debt. In both cases, the credit card holder ultimately loses.