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A subtle factor may influence how you pay your credit card bills

If you have credit card debt, you may be simply making the minimum payment every month. On a monthly basis, this may make sense as it allows you to keep more of your money. But in the long term, you will be paying out much more money due to interest rates than you would if you made larger payments.

Still, the allure of avoiding the short-term pain of parting with a larger amount of money is such that many people will keep making minimum payments. In fact, researchers estimate that as many as 20 percent of Americans will stick to paying the minimum even if they can afford to pay more.

But, why, when it makes more sense to attack the debt as aggressively as possible do so many people continue to shell out just enough to cover the minimum? Well, an economist with a Pennsylvania university believes this could be due to a psychological phenomenon known as "anchoring."

Basically, the concept of anchoring is that a person's decisions can be influenced by information that may not even be relevant to the subject he or she is considering. In the case of credit card payments, the economist postulates that consumers may be influenced by the location of the minimum payment due, which is prominently placed in the center of the account statement.

The economist certainly presents an interesting theory, but another reason that people opt to pay only the minimum is because it is all they can afford. And when this is the case, you can pay out major amounts of money only to fall deeper into debt.

At some point, debts must be addressed. It is both financially and personally unhealthy to try to carry the weight of crushing credit card debt for too long. One possible solution is a debt relief plan that includes Chapter 7 bankruptcy. A Texas bankruptcy attorney can help you file for Chapter 7 which typically allows you to have your credit card debts discharged.

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