Paid to Go Away

As the economy continues its downward spiral, credit card companies are feeling the pinch and taking unheard of steps to combat the battle.

Some companies have been offering customers monetary gifts to alleviate their outstanding balances and close their accounts. With defaults on the rise, the credit card companies are taking a hit with delinquent accounts and those customers choosing only to pay the minimum balance.

American Express is offering a select number of account holders a $300 gift card if they pay off their remaining balance and cancel the card. Citibank is actually offering to match a portion of clients' payments over the minimum amount due per month.

Other companies are simply raising those minimum payments. Most credit card issuers are taking a step back during this time of economic turmoil. Scaling back on issuing cards, making more selective choices to those considered and lowering credit limits are just some of the strategies being used.

Some companies may be helping customers by helping themselves but others like Chase are issuing tougher penalties to make an impact on their customers. Chase, owned by JPMorgan is tacking on a ten dollar a month fee for two year outstanding balances.

American Express plans also to cut back expenses along with their offers to customers and plans to save $1.8 billion in 2009.

Eligible consumers for the American Express offer received a special code that, when redeemed online by Feb. 28, immediately cancels their account and sets the offer clock in motion. Fail to pay off the balance in full by April 30 and you'll be out on both the account and the gift card. (The remaining balance must be paid off under your regular card rate and minimum monthly payment.)

There was a time when credit card companies catered to a wide range of customers. This in hopes to reel in more clients to spend more money. Recently, this plan has backfired with unpaid debt balances and slashed consumer spending. The economy seems to be taking its toll on everything, even the all mighty plastic.

Below is a video of Credit Card minimums on the rise and how it can actually help you.