Credit card companies require low minimum payments that impose significant interest costs on consumers choosing to pay the minimum. Recent legislation has required credit card companies to show on customer billing statements how much interest would be paid and how long it would take to repay the current balance if only the minimum is paid. Behavioral economists would expect this legislation to

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The legislation provides more information, but behavioral economists would argue that anchoring, a cognitive bias where individuals rely too heavily on an initial piece of information (in this case, the minimum payment amount) when making decisions, would likely keep many people paying the minimum despite knowing the long-term costs.

Credit Card Companies Require Low Minimum Payments That Impose Significant