Credit Card Debt

By: AP
By: AP

Alabama consumers struggling with higher gasoline prices may soon experience another strain on their budgets, higher minimum payments on credit card debt.

Banking regulators have issued new guidance on repaying credit card debt that includes increasing minimum payments.

The guidance says the minimum payment should cover interest, fees and a reasonable amount of principal.

Spokesman Dean Debuck at the government's Comptroller of the Currency says banks are expected to implement the change by the start of 2006.

Roger Knauff of Montgomery, director of the nonprofit Consumer Credit Counseling Service of Alabama, says minimum payments have been so low that people had little chance of getting out of debt.

For those with many credit cards in one family, he says, increasing the minimum can create a burden.

He cautioned people applying for credit cards to find out what the minimum payment is because, he said, often it's not on the application.


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