Customers' Fixation On Minimum Payments Drives Up Credit Card Bills:
"The research, by University of Warwick Psychology researcher Dr Neil Stewart, is to be published in Psychological Science, in a paper entitled “The Cost of Anchoring on Credit Card Minimum Payments”. It focuses on the psychological phenomenon of “anchoring” in which arbitrary and irrelevant numbers bias people's judgments. The research reveals that anchoring affects the way people repay their credit card bills. For those people who make only partial repayments of the outstanding balance (about 35% of card holders), the suggested minimum payment on the credit card statement acts as an anchor and lowers the actual repayments people choose to make."
BTW here are some more behavioral finance posts if you are interested. If you are interested in the field (and I have no idea how you would not be!), Wikipedia has a pretty good intro, but if you have just a bit more time both Jay Ritter and Behavourial Finance.net (Martin Sewell) have excellent "primers" on the field. (HT to Simoleonsense.com)