If so, you’re not alone. New research from the University of Warwick in the U.K. found that people are influenced by a psychological phenomenon known as “anchoring” when they assess their statements.
Lead author of the study Dr Neil Stewart explained that many consumers become fixated on the level of the minimum listed on this document, with the result that they end up paying smaller amounts towards their bill.
He tested his theory by comparing the behavior of those paying bills that included minimums with those whose bills had the minimums removed. Consumers who did not see a minimum payment tended to pay off more of their debt.
“Minimum payments distort the behavior of many customers in a way that increases interest charges and increases the duration of their debt,” Stewart warned.
In recent years, federal regulations have forced credit card companies to raise the monthly minimum payments they require, with the aim of helping consumers manage their debt more effectively.
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