Credit Card Minimum Payments On the Rise

Summary

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Many years ago a 5 percent minimum payment was the norm in the credit card industry. A credit card industry consultant named Andrew Kahr convinced a major credit card company to change this policy. Kahr realized that if customers were required to pay less each month, they would borrow more. This of course was good for the credit card company because the longer it takes for an individual to pay off their debt, the more profitable it is for the company. Kahr explained that having a lower minimum payment would ease consumer anxiety about carrying high credit card debt, and often times consumers even believed they were being financially prudent. Andrew Kahr's "innovation" of the 2 percent minimum payment became industry standard.

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Credit Card Minimum Payments On the Rise

Many credit card customers could be in for a big shock when they open their next bill and find that their minimum payments have doubled. This will soon be th...

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