# Minimum due on credit card - huge increase? **URL:** \ **Category:** Factual Questions\ **Created:** [May 9, 2011, 1:56am UTC](https://boards.straightdope.com/t/minimum-due-on-credit-card-huge-increase/581224 "2011-05-09T01:56:12Z")\ **Posts on this page:** 5\ **Page:** 2
**Author:** ![control-z](https://avatars.discourse-cdn.com/v4/letter/c/eada6e/32.png) [@control-z](https://boards.straightdope.com/u/control-z)\ **Post date:** [May 9, 2011, 8:34pm UTC](https://boards.straightdope.com/t/minimum-due-on-credit-card-huge-increase/581224/21 "2011-05-09T20:34:11Z")
I have a Discover and the minimum payment on a $90 balance was $40 (rough numbers.) I’d never seen the minimum that high before. A friend of mine had a similar experience. I figured it was due to the CARD Act trying to (forcefully?) get people out of debt. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [May 9, 2011, 10:20pm UTC](https://boards.straightdope.com/t/minimum-due-on-credit-card-huge-increase/581224/22 "2011-05-09T22:20:15Z")
> [@wmfellows](#): > > That is entirely false. Credit card companies love cardholders who pay off entirely. I am one of them. I have been continuously upgraded with more rewards, benefits, etc during my entire banking relationship with the company. I have carried a balance perhaps once every five years. > > In fact, customers like myself are brilliant, as the CC does not need to carry financing to cover me, does not need worry about write-offs and makes a tidy profit on me from fees. It’s brilliant and low cost for them. > > People whinging on about credit cards is typical, but as typical their primitive understanding of their finances. > > As for loan shark rates… 23% annual is not loan shark rate, positive gift really. Loan sharks practice that as a daily rate. NO, the ideal customer is the one that maxes out their card and then makes only enough to stay afloat and cover their balance. They reward you by raising your limit in the hope you’ll run up your balance to the point where you pay interest. You’re being cruel and teasing them with false hope by occasionally not paying it off in full. Loan shark is 6-for-5, or 20% a week (ha ha). True, not quite up to credit card standards, but not legal either. When the worst institutional rates are in the 10% and under range, charging 30% to their most fiscally inept and vulnerable customers verges on mercenary predation. Plus, they charge the merchant 1.5% to 3% (or more) for that first month, whether you pay interest or not - which works out to 18% to 36% PA or greater, if you did not buy a whole month before your bill was due. There’s no reason to cry for or apologize for the credit card companies. ---
**Author:** ![wmfellows](https://avatars.discourse-cdn.com/v4/letter/w/c2a13f/32.png) [@wmfellows](https://boards.straightdope.com/u/wmfellows)\ **Post date:** [May 9, 2011, 10:55pm UTC](https://boards.straightdope.com/t/minimum-due-on-credit-card-huge-increase/581224/23 "2011-05-09T22:55:10Z")
> [@md2000](#): > > NO, the ideal customer is the one that maxes out their card and then makes only enough to stay afloat and cover their balance. This is GQ, lovely assertion, however, that is merely your assertion and has no place here > [@](#): > > They reward you by raising your limit in the hope you’ll run up your balance to the point where you pay interest. You’re being cruel and teasing them with false hope by occasionally not paying it off in full. No, the CC companies have quite sophisticated analytical software and excellent customer profiling. With more than a decade of data on me, there is no whimsical hope for running anything, my habits are quite clear. There is no hope I will run a balance, rather there is the expectation I will increase the amount of spending channelled through the card, and thus they will make more on fees, and at a very low risk, since I do not carry and thus there is no exposure on the balance (this is really AMEX’s model, although mine card is a Visa since AMEX is worthless in Africa). Balance carrying customers are not necessarily attractive, they impose financing costs, tend to default, and are higher maintenance. The absolute ideal is the AMEX niche. You evidently don’t know anything on the subject matter or the business other than personal assertion based on God knows what, I suggest moving on. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [May 10, 2011, 2:19am UTC](https://boards.straightdope.com/t/minimum-due-on-credit-card-huge-increase/581224/24 "2011-05-10T02:19:59Z")
I read a lot and heard a lot of these financial commentaries and these all seem to agree - customers who pay a lot of interest, good; customers getting a free ride, not so good. Hence my lovely assertion which PBS and nytimes also lovely assert. Where do you get your assertions? Know anything about the business? In digging for these cites, I found nothing that said the ideal customer paid no interest. In fact, cite 2 nytimes says they are going to get tough on no balance types with things like reinstating annual fees, removing the no-interest grace period, etc. I agree with one point of yours, that customers who default are not good customers, a profound and fundamental observation. 😃 > **[Secret History of the Credit Card | FRONTLINE](https://www.pbs.org/wgbh/frontline/documentary/showscredit/?)** > > The surprising history and clever tactics of an industry few Americans fully understand. The industry’s most profitable customers, the ones being sought by creative marketing tactics, are the “revolvers:” the estimated 115 million Americans who carry monthly credit card debt. Ed Yingling, incoming president of the American Bankers Association, tells FRONTLINE that revolvers are “the sweet spot” of the banking industry. [http://www.nytimes.com/2009/05/19/business/19credit.html](http://www.nytimes.com/2009/05/19/business/19credit.html) A 2005 report by the Government Accountability Office estimated that 70 percent of card issuers’ revenue came from interest charges, and the portion from penalty rates appeared to be growing. The remainder came from fees on cardholders as well as retailers for processing transactions… [Credit card companies raising rates, even for ideal customers | MPR News](http://minnesota.publicradio.org/display/web/2009/03/13/credit_cards_rising_rates/) talks about the posters question. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [May 10, 2011, 3:04am UTC](https://boards.straightdope.com/t/minimum-due-on-credit-card-huge-increase/581224/25 "2011-05-10T03:04:47Z")
> **[The Times & The Sunday Times](https://www.thetimes.co.uk/)** > > News and opinion from The Times & The Sunday Times \*Prudent customers risk losing credit cards James Ashton and Robert Watts, The Sunday Times CREDIT card customers who pay off their balance each month are as much risk from being cut off by their lender as those that have lost control of their spiralling debts… Credit checking agencies say banks are beginning to weed out customers with faultless borrowing histories because they can make little profit on them… \* Odd, these should be the ideal customers I’m told, but their cards were cancelled because they are not generating enough interest to be worthwhile. [Previous page](https://boards.straightdope.com/t/minimum-due-on-credit-card-huge-increase/581224.md?page=1)