Surprisingly, not many. Although we are a nation of cardholders, most of us don’t really understand how the system works. So recently, the US government has taken steps to help make the system more affordable and user-friendly.
On May 20, Congress passed new legislation that makes some key changes to the way credit card companies do business. Included in the bill are regulations preventing credit card companies from charging late fees for payments that arrive on the afternoon of the due date, and preventing the companies from raising interest rates without fair notice. The companies will also be prevented from charging hidden fees for such things as phone payments. For cardholders who pay over the minimum balance, credit card companies will also be required to apply the extra amount to the highest-interest segment of the cardholders’ debt.
Until now, credit card companies used these and other loopholes to interlace hidden fees into what consumers thought was a fair agreement. As a result, cardholders have been facing mounting debt due to increased interest rates, and have recently had more trouble paying off debt than ever before. Thus, at a time when the economy is in great need of consumer spending, the average person is spending less money to avoid paying exorbitant fees on credit cards. This legislation will go into effect early in 2010.
According to the 2008 Nilson report, the US had 700 million credit cards in circulation, which translates to more than two cards per person (including children) in the US. Clearly we are a nation that loves to spend money and we love doing it on credit. So who is to blame for the credit crisis? Is it over-spending consumers or greedy credit card companies?
The answer is, both. Credit card companies are guilty of using fine print and arbitrarily hiked-up interest rates to stay rich. And as a nation of consumers, we are guilty of spending way more money than we earn every year, thereby legitimizing the practices of the companies who provide us our spending cash.
Never in recent history has there been such an obvious need for education on financing and budgeting. It can easily be argued that with a clearer understanding of how credit and debt work, consumers would make better decisions about their own budgets.
The Money Merge Account from United First Financial aims to help consumers and businesses alike to escape the liability of high-interest debt. This ingenious program uses the information you provide about your expenses to calculate a schedule to pay off debt in as little as half the time, and with virtually no interest.
By transferring money between ordinary bank accounts and lines of credit and making payments on strategic days of each month, you can start paying down the principal amounts of your debt and stop putting all your money into interest. The program prompts the user to make transfers through text messages, and is integrated to allow you to approve the transfers directly from your mobile phone.
Amidst a sea of self-proclaimed revolutionary financial software, and debt reduction plans that only serve to add another creditor to the list, this program really does what it claims to do. It even adjusts your payment schedule based on changes in your financial situation, such as lay-offs and big purchases. The best part is, it’s a one-time purchase with no monthly fee or percentage rate. This program is truly innovative.
Get more information about the Money Merge Account.
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