How You Can Help
Contact your senators to co-sponsor and support the Credit Card Minimum Payment Warning Act (Akaka).

Summary
Credit card companies use a variety of unfair practices to trap consumers in a cycle of over-priced debt. The companies are allowed by regulators to raise your rates for any reason, including no reason. They are allowed to operate nationally out of states, like Delaware and South Dakota, with weak consumer laws and no limits on interest rates or fees.

Consumers should either pay balances in full, or make the largest payments they can afford, and always pay early in the cycle to avoid late fees. But for years the firms lowered minimum monthly payments and encouraged the use of cards for everyday expenses – through rewards programs – so that many consumers accumulated massive amounts of credit card debt. Until recently, a consumer who owed credit card debt of $5,000 at a common 16% APR, who only made the typical 2% minimum payment, would take 26 years to pay off the card, even if it was cut up and never used again. Even the federal regulators finally took notice, and recently ordered banks to increase minimum payments by a modest amount.

In 2005, Congress passed punitive legislation long sought by the powerful credit card industry to make it harder and more expensive to file for bankruptcy, and to force consumers to pay off more credit card debt if they do so.

The new law includes a weak yet to be implemented generalized disclosure of how many years it will take to pay off the card if you only make the minimum requested payment. S. 393, the Akaka Credit Card Minimum Payment Warning Act, would repace that industry-approved disclosure with a specific, customized warning. Learn more.

Resources
Transcript of PBS Frontline Interview with PIRG expert

PIRG testimony on credit card interchange fees (February 2006) at House Committee on Energy and Commerce Hearing: http://energycommerce.house.gov/108/Hearings/02152006hearing1774/hearing.htm

PIRG testimony (PDF) on credit card practices, before U.S. Senate Banking Committee (April 2005) hearing http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=154

PIRG Fact Sheet: A Road Map To Avoid Credit Card Hazards
HTML: http://www.truthaboutcredit.org/roadmap.html
Full color pdf: http://www.truthaboutcredit.org/roadmap.pdf

PIRG Report: Graduating Into Debt Credit card marketing on college campuses

PIRG Report: Deflate Your Rate: How To Lower Your Credit Card APR

U.S. GAO study of minimum payment disclosures (April 2006)

Learn more about the Credit Card Minimum Payment Warning Act (Akaka-HI) S. 393

Learn more about the S. 499 (Dodd-CT), the Credit Card Accountability Responsibility and Disclosure Act