Q:

How does Care One calculate a minimum payment for a credit card?

A:

Quick Answer

The minimum payment calculated by Care One varies based on a person's debts, income and expenses, as of February 2015. Care One offers debt relief services that combine all debts into one account to set up a single monthly payment schedule.

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Full Answer

The formula for determining the minimum balance on a credit card is typically a percentage of the outstanding balance on the account, with the exact percentage varying depending on the card issuer. When a person sets up an account with Care One, the company goes over his financial situation and offers plan options that meet his needs. After a plan is selected, Care One sets up the payment schedule.

When a person enrolls in one of Care One's programs, he cannot use his credit cards or open more accounts until the debt is paid. Care One negotiates with his creditors to make certain concessions, such as lower interest rates and no late fees, available to make paying off the debt easier. Once an agreement is reached, Care One pays the creditors a settlement amount, and the person makes payments to Care One. As part of the arrangement, the accounts are closed.

In certain cases, creditors may not accept the arrangement and send the accounts to collection agencies instead.

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