Does Your Minimum Payment Calculation Look Too Low?

Did you recently receive a credit card statement with a minimum payment calculation that looked too low? One of my clients did. While working at her office, I entered the credit card charges into QuickBooks, as usual. But as I looked more carefully at the statement, I noticed that the minimum payment calculation was only $10! And her balance is over $20,000! She always pays well more than the minimum payment, but still. The credit card company obviously got the minimum payment calculation wrong - or did they?

Since she always pays more than the minimum, she didn't want to take the time to call the credit card company to see if their minimum payment calculation was incorrect. Later, I did a little online research, to see if her credit card company had lowered the minimum payment, but my research yielded nothing.

But I wondered - how many other people:

• received bills like this
• where the minimum payment calculation was incorrect (or worse, intentionally lowered!)
• and who have high balances
• but who will mistakenly make that minimum payment?

Warning: making that minimum payment is a bad idea! If you find yourself wondering if the minimum payment calculation is too low, call your credit card company to see if they made a mistake. Remember, the minimum payment calculation should always be more than the finance charges. If it isn't, call the credit card company and ask them to recalculate the minimum payment.

Better still, try to get rid of credit card debt altogether. Credit card debt is not your friend!