Number: RS22352
Title: Credit Card Minimum Payments
Authors: Pauline Smale, Government and Finance Division 
Abstract: Guidelines on credit card lending, issued in January 2003 by four federal regulators of depository financial institutions, were critical of the general easing of minimum payment requirements by credit card issuers. The guidelines, issued because of safety and soundness concerns, communicated expectations of more prudent practices. In response, credit card issuers began adjusting their minimum payment formulas, raising the amount of the required monthly payment. Congress has focused on the need to increase consumer awareness of the financial jeopardy that can result from paying only the required minimum. The Bankruptcy Act of 2005 (P.L. 109-8, 119 Stat.23) requires the placement of a standardized minimum payment warning on every periodic statement. Several bills have been introduced in the 110th Congress that would enhance the disclosure to cardholders regarding minimum payments. This report provides an overview of the issues and congressional action.
Pages: 6
Date: April 4, 2008