Consumers already burdened by higher energy costs are being saddled with another drain on their finances : higher minimum credit card payments.
The higher minimum credit card payments are the result of January 2003 guidelines issued by the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The Office of the Comptroller of the Currency, or OCC, regulates national banks and is concerned that many cardholders have credit card debts that will take decades to pay back. To prevent this problem, these regulatory agencies proposed that, by the end of 2005, credit card issuers establish reasonable periods for paying back balances, such as a seven- to ten-year payback or amortization period
Card issuers were supposed to adopt the raised minimum payments by the end of 2003. The federal regulatory agencies acted after years of seeing credit card issuers lower minimum payments because of “competitive pressures and a desire to preserve outstanding balances.” Credit card lending consistently yields greater profits for large bank issuers than other services, Federal Reserve data...
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