My Credit Card Company Raised My Minimum Payment

Reader Question: My Chase account just raised my minimum payment from 2% to 5% to get their money back faster. Is that right? To more than double the minimum payment without notice?

If you mean to ask if it's legal, then the answer is yes. Credit card companies can get away with a lot, and lately (because of the economy) they've been showing just how ruthless and manipulative they are. Whether you realize it or not, they probably gave you "notice" in the form of some fine print buried three paragraphs deep in a credit card statement. That's usually how they "notify" customers of pending changes.

Most credit card companies are in a financial panic right now, and for obvious reasons. Because of the recession, rising foreclosures rates bankruptcies, and other factors, they've been losing a lot of money in the form of defaults. Many people are turning their backs on their credit card debts in order to save their homes. So the card companies are doing whatever they can to minimize losses.

In addition to raising minimum payments, which you've experienced firsthand, they are also raising interest rates on their customers -- even for their best customers, who've never missed a single payment. Another common trick is to change the payment due date, but to bury this in the fine print on the credit card statement. That way, when somebody misses the new due date, the credit card company can pile on late fees.

• Is is ethical? Clearly not.
• Is it legal? Unfortunately, in most cases, their actions are within the law.

But many of these practices won't be legal for much longer, because the laws are changing. The government has finally -- long overdue -- passed some legislation to curb the abusive practices of these companies. The C

Lastly, most card issuers have been lowering credit limits for their customers, also to minimize losses. This one I can actually understand. But most of their other tactics are just plain dirty.