Education

Recent Developments in the World of Credit

Penalty Interest Rates: Miss one payment by as little as one day and your rate can jump from 12 or 13% or even 30%. On our Debt Consolidation Program you will be locked in at a low interest rate until completion of the program. This will get you out of debt much faster and save you money.

Lower Minimum Payments: This feature sounds good to a lot of consumers but in reality can result in higher interest payments. Minimum payments have typically been 5% of the credit card balance. Today, many cards come with minimum payments as low as 2% . That translates into higher debt for longer periods of time. Enroll in our program and we will be able to reduce your payments and lock in a low interest rate.

Shrinking Grace Periods: The average grace period in 1990 was 30 days. Today, the average grace period is only 21 days. Now it is harder than ever to make interest free purchases with your card. The amount credit card issuers collect in late fees has quadrupled since 1996 from 1.7 billion to 7.3 billion last year.

Nuisance Fees: Some are designed to penalize cardholders who deviate ever so slightly from the policies stated in the card’s disclosure. The trouble is that these policies are hard to read or figure out. It is typical today to be charged a late fee for being no more than one day late. It is also common today for that late payment to instantly hike up your interest rate. Banks are always looking for new ways to make money. There are ways they extract more revenue from consumers. There are no additional fees when enrolled in a debt consolidation program.

Transaction Fees: Unfortunately for credit card issuers, many cardholders keep credit card payments current. They pay off their balance within the card’s grace period thereby avoiding finance charges. To compensate and increase revenue, many issuers impose transaction fees. Typically, transaction fees are 2 or 3% of a purchase. Transaction fees can add up quickly when cards are used frequently.

Late Fee: The average late fee is now $29.88-almost triple the $11.96 average of 1994 and it is now much easier for credit card companies to charge late fees. Many creditors have decreased the amount of time between when the bill is mailed and when payment is due. So late is sooner than you think! If that wasn’t enough, many creditors now will automatically raise your interest rate (often by 8 or 9 points) if you make one late payment. There are no late fees when you are enrolled in our debt consolidation program.

Over-The-Limit-Fees: Charges made beyond the credit limit of a card are possible whether it is done on purpose or because of a bookkeeping error on the part of the cardholder. When this happens, the credit card issuer penalizes the consumer. These types of fees have more than doubled from $12.56 in 1994 to $27.40 in 2003. There are no over-the-limit fees when you are enrolled in our debt consolidation program.