The Economist reports research by Neil Stewart that indicates that the "minimum payment" information that is by law included on credit card statements may result in lower payments and higher interest costs. Apparently just including the minimum payment line creates a mind set that results in people making smaller payments than they would were the bill presented without that entry. Because those smaller payments result in more debt staying on the books, they wind up paying more interest.
The law which requires the companies to define a minimum payment was apparently intended to help consumers. Its apparent failure demonstrates the importance of confirming things that appear reasonable with actual observations.
The fundamental lesson here is to be careful that you think things through. Clearly credit cards cost a lot to carry your debt, and if possible it is better to pay off the balance with each bill. If that means that you avoid unnecessary purchases, or save up in advance of a purchase, all to the good!
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