Minimum Payment on BOA CCs

[boosami]

I'm doing some research for a friend. Does anyone happen to know how the minimum payment is calculated for BOA credit cards? I can't find the information on their Web site, but I assume between 2 and 4% of the statement balance.

Anyone have a BOA credit card or know the percentage for sure?

[noppenbd]

I believe by law credit cards have to charge at least 2% of the balance as a minimum payment.

[disneysteve]

I believe by law credit cards have to charge at least 2% of the balance as a minimum payment.

True, but some raised their minimums to 4%. I think OP was trying to find out which BoA did.

Of course, either one is absurd. The minimum should be 100% and then we wouldn't have all this trouble. Even 25-50% would eliminate so many problems.

[GREENBACK]

!00% would mean that good creditors no longer get great interest rates since the cc companies can no longer rely on "deadbeats" to make them rich.

[maat55]

!00% would mean that good creditors no longer get great interest rates since the cc companies can no longer rely on "deadbeats" to make them rich.

Interest rates should not be a factor. PIF is 0%.

[disneysteve]

Interest rates should not be a factor. PIF is 0%.

But it would eliminate those 0% offers that the savvy folks take advantage of to use the CC company's money to make more money elsewhere.

[mrpaseo]

With a $14,500 balance on a zero percent card they required my payment due of $145.00 which tells me 1% but that might be just because it's a zero percent interest card and they want me to hold a balance until they start charging me interest...

Little do they know I have that much sitting in my ING Direct waiting to pay it off two weeks before the interest kicks in

Ray

[boosami]

...The minimum should be 100% and then we wouldn't have all this trouble...

In reality, they'd charge more like a 114.9% "minimum." Then how many people would use credit cards?

Related to this, they are trying to pass a law to make consumers more aware of how long (and the cost) it would take to pay back their debt paying just the minimum. The bill proposes to put it on every billing statement. For example, it might state that your $2,500 balance would take over 30 years to pay back at the minimum and cost you almost $8,000 total.

The bill has been presented since at least 2004, but so far has not had success in passing.

S. 2542, The Credit Card Minimum Payment Notification Act of 2008

[disneysteve]

they are trying to pass a law to make consumers more aware of how long (and the cost) it would take to pay back their debt paying just the minimum. The bill proposes to put it on every billing statement. For example, it might state that your $2,500 balance would take over 30 years to pay back at the minimum and cost you almost $8,000 total.

I think that is a great idea (I have since it was proposed).

Balance: $10,000
Minimum Payment: $200
If you pay just the minimum payment, it will take 147 years and cost you a total of $32,846 to repay your balance.

I wonder if seeing that in print each month would change people's behavior.

[boosami]

I think those hard totals would really cause some people to "wake up" about the true cost of maintaining a balance on their cards. It's just insane to see that you'll be repaying 2, 4 or 10 times your initial balance over time!

I think consumers as a whole need to be totally re-educated about the pros and cons of credit. So many people don't have a basic sense of true cost.

[glock35ipsc]

I have paid off 2 BoA cards this year. The one with 0% interest was 1% of the balance, while the other with 8.99% interest was just slightly below 2% of the balance.

[boosami]

Thanks glock. My friend will be happy to hear the percentage will likely not be 4%!

[IVSPORT]

I think that is a great idea (I have since it was proposed).

Balance: $10,000
Minimum Payment: $200
If you pay just the minimum payment, it will take 147 years and cost you a total of $32,846 to repay your balance.

I wonder if seeing that in print each month would change people's behavior.

Thanks to an older brother's advice, I learned that the minimum balance is never an option when I got my first CC at 16 or 17. Ever since then, I've always paid my balance in full, usually between billing cycles just to keep a 0 balance as often as possible. I think that bill is a great idea but will go nowhere because it will take profits away from CC companies, who have more lobbying power in DC than average citizens struggling with debt do.