Imposing Minimum Credit Card Payments May Increase Delinquency: Bank of Canada Study

Regulating minimum payments on credit cards could benefit some consumers by reducing interest charges, but could lead others to become delinquent, a Bank of Canada study suggests. Requiring cardholders to make higher monthly payments is one way policymakers can attempt to reduce debt, the study said, as first reported by Blacklock’s Reporter. “Forcing cardholders to pay more of their balance each month is one way policymakers can attempt to reduce debt,” the researchers wrote. “One reason to do this is that high credit card debt increases consumer fragility and, because interest rates are high, an increase in debt leads to large interest payments which can be a drag on economic activity.”...