Millions of credit card borrowers are about to face larger monthly payments, a change that represents both good news and bad for consumers.

Under new guidelines suggested by the federal government, starting in January minimum monthly payments for credit card debt will generally increase. Many mortgage lenders will no longer require payments equal to 2 percent of the debt, an amount that includes interest and fees. Instead most will now require a payment equal to 1 percent of the debt plus fees, interest and charges. Altogether, the new payment will be more than 2 percent of the borrower''s outstanding debt in many cases.

This is the good news. The higher monthly payments will reduce overall interest costs and force people to borrow less with credit cards.

The bad news? It will reduce the ability of many consumers to obtain a mortgage.

According to the most recent Federal Reserve report, we now have $799.1 billion dollars in outstanding credit card debt. That''s about $2,681.54 per person: For a household with four people, average credit card debt amounts to almost $10,750.

Such debt would not be a problem if it were offset by equally robust savings. Unfortunately, the Bureau of Economic Analysis says our saving percentage was -.2 percent in both October and November. Instead of putting money away, in those two months alone we spent $37.4 billion more than we earned.

Credit card financing is unsecured debt -- a form of financing that''s especially risky for mortgage lenders. More risk means higher interest, and in the case of credit cards interest rates between 18 and 28 percent are well known.

Let''s imagine a household with $10,000 in credit card debt. Imagine also that the interest rate is a modest 18 percent and that a monthly repayment equal to 2 of the outstanding balance is required. If you borrowed no more this loan would take 7.8 years to repay and interest over time would amount to $8,622. Increase the required monthly payment to 4 percent, the same debt could be repaid in 2.7 years and interest would amount to $2,628 -- a plump savings of almost $6,000.

The new repayment standards for credit cards will reduce credit card debt for millions -- but the higher minimum payments will also impact mortgage applications.

When mortgage lenders look at mortgage applications they consider many financial issues. Of particular interest is what borrowers spend each month, spending divided into two general categories: Housing expenses and consumer expenses.

Housing expenses are typically seen as mortgage interest and principal plus property taxes and insurance -- "PITI" in lender jargon. Consumer expenses include PITI plus such things as required monthly payments for credit card bills, auto payments, student loan pay, etc.

Expenses are described as a percentage of monthly income. If your household has a monthly income of $8,000 and monthly PITI is $2,240 then your "front" ratio is 28 percent. If overall required expenses are $2,880 then the "back" ratio is 36 percent. Overall, lenders would say the ratios are "28/36."

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