Requesting a Lower Minimum Payment on your Credit Card

by : Ronnica Rothe

If you have credit card debt, you are paying the credit card company each month at least a minimum payment. As your balance and interest rates go up, so will this .

The minimum payment required each month is usually calculated by adding together the monthly finance charges, any past due amount, and 1% of the balance on the card. The monthly finance charges are based on the interest rate you have on that account. If the interest rate goes up, so does this minimum payment. Also, the balance will greatly affect your monthly payment. A balance of $1800 will require a monthly payment of $18 plus fees. A balance of $18,000 will require a monthly payment of $180 plus fees.

If you fall behind, that greatly increases the next month's minimum payment. They will add in the missed payment as well as a late fee. The interest rate might also be increased so that the finance charges will be increased. You will need to try to seek a lower minimum payment in order to not have this happen again.

In order to , you can work on lowering your balance, seek a lower interest rate, or both. The only way to lower your balance is by paying it off. By paying more than your monthly payment, you are paying down the balance of your card, which allows you to have a lower minimum payment in following months. Lower balances carry lower fees, and of course the 1% of the balance will also be lower. This requires that you have enough money to pay more than the minimum payment which is probably not the case if you are seeking to lower your monthly payments.

The other way to lower your minimum payment is to lower your interest rates. If you have good standing with the company and/or a good credit score, it might be beneficial to directly ask for a lowered interest rate in writing. If this is not the case, they will probably deny a request and you will have to find another way to lower your interest rate. One way that the credit card company might suggest you lower your interest rates is through a debt management plan. A debt management plan allows you to receive certain incentives like reduced fees and interest on your accounts which enables you to pay off your accounts at a quicker rate. If you are willing to stick to the plan, you will see your accounts lower at a significant pace, much more quickly than you could do on your own. You might even be able to do this while paying lower monthly payments as well.

To find out more about a debt management plan, talk to a . They can advise you on other ways that you might be able to reduce your minimum payment if other options are available. By reducing your minimum payment, you are freeing up more of your funds to be used for other purposes.