Have you ever felt like your financial life is out of control? If your worst financial nightmares are the reality, you are not alone. The number of Americans with excessive credit card debt continues to rise, despite economic strains. The average American household has around $6,600 in credit card debt. And, with interest rates as high as 28% in some cases, digging out of such a hole is nearly impossible.
Take a glance at some of the reasons Americans fall into and remain in credit card debt, as well as a few helpful tips for regaining control in financial madness.
First, the majority of Americans do not adequately understand the terms and conditions of their credit card contracts. These are often in fine print and can be a mini booklet in length. They are designed by lawyers to be difficult to understand. In any case, this leaves the consumer especially vulnerable to making blunders that warrant late fees and interest rate hikes. Timing is one of the creditors’ greatest tools for deception. If a consumer makes a payment even one day late, they are slammed with late fees and the card’s interest rate is raised. In some cases, interest rates have been increased from just 9% to nearly 30%.
At these steep rates, it is doubtful that the debtor will be able to pay off balance in full each month, and the debt becomes “revolving” debt, a form of financial cancer. Revolving debt consumes large portions of monthly income without bringing in any actual goods or services because it is mainly comprised of interest and fees. These rate hikes and late fees do not take into account unforeseen detrimental circumstances faced by the consumer. As unemployment, divorce, or illness often force consumers to make only the minimum payment while they struggle to make ends meet, it becomes even harder to pay off balances in full.
Further, rising debt may also worsen any existing health conditions as it contributes to increased anxiety levels. A study conducted by the Ohio State University School of Public Health analyzed the link between financial hardship, illness, and stress and anxiety among women. The study found that women with a major illness, in this case, cancer, were more likely to have increased levels of anxiety. They were also more likely to exhibit signs of clinical depression with increasing financial hardship.
This is just one example of how excessive credit card debt is an especially dangerous trap when life deals unexpected circumstances, like illness. Thus, it is vital to pay off any credit card debt quickly and efficiently.
Begin by tackling debt with the highest interest rates first. Budget your largest monthly payments toward these balances, as they are the ones, you will pay the most on overtime. Once these are paid off, apply that budgeted amount to the next balance and so on until all the balances are paid off in full. Also, avoid scams when seeking professional help to resolve the debt.
Many fly-by-night debt settlement companies make claims of settling the debt for as little as 40% of what was originally owed, but in reality, collect outrageous upfront fees without delivering results. Even so, there are legitimate debt settlement companies out there. A reputable debt settlement company will settle at least one of your accounts before ever accepting service fees, and are mandated by the FTC to do so. Though your finances may feel like a nightmare, there is hope. Take the time to explore realistic ways of eliminating debt one step at a time.
Business around the world has taken a new shape and form and the concept of hard cash usage today looks like historic — maybe even prehistoric! Credit cards and debit cards have taken the place of hard cash. It is, therefore, necessary for the merchants and sellers to use some type of credit card processing device. With equipment in place, a business can realize an increase in the sales of the goods and services. This directly means that those merchants who do not have any credit card processing system in place will lose potential customers because customers who are dependent on credit cards will look for alternative businesses which allow them to use credit cards.
Credit card processing can be defined simply as a method where payments for goods and services are electronically accepted and funds are transferred to a merchant account from the consumer account. Credit card processing terminals can be used in brick and mortar setups, but have many other uses as well. Initially, these terminals were not meant for mobile services like those of a cable technician, home repairs, plumbing services, pizza delivery, etc.
However, with the development of technology, mobile units of these credit cards processing equipment have been developed. Some work with wide area coverage network while there are some with limited area coverage and are bound within a boundary. In traditional brick and mortar setup, the Point of Sale system or the card terminal is used to accept payments.
The card is swiped with the equipment which has an integrated card reader. When the card is swiped, the Point of Sale system connects to the processor either using a dedicated internet connection or using a dial-up modem connection. In the case of mobile services, these card terminals operate within wireless networks. If the terminal is in the area where there is network coverage, the terminal will connect to the processor wirelessly when a card is swiped. In the case of limited network coverage, if the wireless POS system goes outside the coverage area, the terminal will not work.
For online businesses, the concept changes completely. There is an online virtual terminal in the case of online businesses. The terminal, in turn, has a payment gateway. The merchants log in to the virtual terminal through a web browser using their internet connection. As a matter of fact, the merchants can use any internet connection. The merchant will then have to key in the customer information and the terminal will start processing. For merchants who are advanced users, the payment gateway can be integrated via programming and API calls.
Businesses dealing with mail orders and telephone orders make use of a system called MOTO processing where MOTO is the abbreviation for Mail Orders, Telephone Orders. Because of the emergence of the web-based ordering interface, the MOTO services are not very popular. So, if you are a merchant, you must consider using some credit card processing system so that you can retain your customer base and get new customers.