Credit card companies allow card holders to pay a minimum payment—a set percentage.   This makes the payment more affordable but ultimately allows the credit card company to collect huge amounts of interest

Congress recently passed the Credit Cardholders’ Bill of Rights Act of 2009 to protect consumers against unfair interest rate changes and fees.  Five out of 99 attending senators voted against the bill, and four did not vote.  Two of the five “Nays” were from South Dakota, the state where most credit card companies are headquartered due to the state’s lack of a statutory limitation on credit card interest rates and other favorable conditions.  A few days after the vote, Pres. Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.

Still, some call for legislation forcing credit card companies to increase the minimum to 5%  to protect consumers from excessive interest.  Chase Bank has voluntarily raised its minimum payment requirement from 2% to 5% on certain cards.  This increase causes difficulty for those who cannot afford the new payments; many pundits are framing Chase Bank’s action as consumer abuse, but it’s actually the prudent thing to do.  In the long run, it will keep consumers’ interest charges from growing out of control.