Credit-Card Issuers' Problem: People are Paying Bills

That credit card bill you?ve been paying every month? The one you?ve been maybe paying a little more than the minimum on? Well, the credit card issuers would like you to stop that. How does now work for you?

According to a Wall Street Journal piece, while on the one hand Americans are deeper in debt than they?ve ever been before (Credit Card Issuers: ?YAY!?), they?re also paying off bigger portions of their monthly credit card bills (Credit Card Issuers: ?BOO!?).

Card issuers make a surprising amount of bank by collecting interest off of unpaid balances. Timely bill paying cuts in to that; and that cuts in to the bottom line.

“Normally at this point in the economic cycle, you start to see payment rates decline. But that’s not happening,” says Richard Srednicki, who runs the credit-card business at J.P. Morgan Chase & Co., the nation’s second-largest card issuer. “It is a tougher business if payment rates continue to stay up and consumers continue to pay off more. It’s something we’ve got to understand and work at.”

Adding to card issuer woes: new federal bank regulations issued back in 2003 help ensure that cardholders pay off more each month than just the fees and interest charges that have accumulated.

You can read the full story at Credit-card issuers’ problem: People are paying bills.