Filing for Bankruptcy Might Follow Psychological Phenomenon

Credit card debt that rolls over from month to month accumulates rapidly. Filing for bankruptcy might eventually be the only way to get back on track. Ohio consumers may be interested in the findings of an economist at a university in another state. He found that credit card companies use psychology to get people to pay the minimum amounts.

Researchers also estimate that between 9 and 20 percent of U.S. credit card holders choose to pay the minimum amount due rather than the full outstanding amount — even if they could afford to pay the higher amount. The economist reckons the manner in which the credit card companies print their statements with the minimum required payment prominently placed is a psychological phenomenon that is called anchoring. This is a method of putting information that could influence a consumer’s decision in a position that will anchor his or her focus.

In the case of credit card statements, it is the minimum amount due that is anchored. Although the 2009 Card Act forced companies to include information about minimum payments on the bills, those disclosures are not printed in anchoring positions. This law seems to have little influence on consumers’ decisions of how much to pay.

Ohio consumers who have fallen into the psychological anchoring trap of credit card companies may be looking for ways to get out of debt. An experienced bankruptcy attorney can answer those questions, and after evaluating the circumstances, he or she can suggest the most appropriate manner in which to proceed. Whether the solution involves filing for bankruptcy or not, with professional guidance a fresh start might be achieved.

Source: abc2news.com, “Inability to pay down credit debt may be psychological“, Accessed on March 3, 2017