VISA Debit Cards: An Economic Solution and the Decline of Credit Cards
By : Chris Enterprise - If you are still wondering why your stock portfolio plummeted 50%, why your IRA lost 60%, why your home lost 40%, why your business grosses 50% less today than it did 2 years ago, or why your credit card company has unexpectedly closed your account or transferred it to another banking institution, the answer is simple: we outspent.
How?
Outspending may be chalked up to a lack of control over personal and business expenses: an inability to balance a checkbook, a willingness to take a loan for a car or house without the ability to afford the loan payment, or depending on credit card balance transfers to maintain a lifestyle.
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Accountability is a worldwide and community effort. It is also not solely credited to the consumer. There are many underlying factors involved leading to the current economic swing and preventing these circumstances from happening again is essential. To understand the causes of the economic situation more clearly is to also understand the influence of marketing, media, and major financial institutions. It is also important to see how the media operates. Given the amount of money companies spend on advertising, how credit card companies incessantly drive credit card applications to consumers, and how spending control is rarely, if ever, encouraged throughout our culture, it’s not surprising the global economy has swung negative.
Every loan agent generates revenue from a car, home loan, or approved credit card application. Therefore there exists a blatant conflict of interest between credit card companies who encourage consumers to spend money they don’t have, and the ability to repay the debt to the lending bank. The credit card company does not maintain an account balance. The cash owed from and paid to the issuing credit card company is held by a partner bank who temporarily loans the funds to the credit card holder until the credit card holder repays the debt to the lending bank. The credit card company profits each time the consumer makes a purchase by charging an interchange fee or merchant fee to the merchant. The credit card company also benefits when the credit card holder fails to pay off the credit card debt each month. In such situations the credit card company’s partner bank answers for the debt of the credit card holder putting the lending bank at risk.
As a result, the bank’s capacity to loan money to other clients, and cash stability is dramatically reduced since paying the merchant reduces the amount of cash in the bank’s vault (also known as current assets). The credit card company generates additional revenue from interest fees and penalty charges until the credit card holder pays the full balance.
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The check cashing business may sell the debt or hand the case over to a debt collection agency where the debt collection agency may further seek to collect from the individual or family by accepting whatever form of payment available, including personal assets. Such personal assets may include a car, home, jewelry, or other personal items. Debt collection agencies may also monitor the income declared by an individual, and once the debt collection agency sees the individual has started generating income again the debt collection agency may then pursue the case to collect the debt, plus interest and penalties.
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Meanwhile, the check cashing store has already written off the debt and taken the tax deduction, and still financially gained while the debt collection agency is betting on its ability to collect the debt plus the additional value of the indebted person’s assets or a percentage of the indebted person’s paycheck throughout some future duration.
Whether the debt collection agency was driven by a check cashing store on the street corner, a home mortgage banker who wrote a home loan to collect the loan processing commission, or a car salesman to collect the sales commission, the intention behind the commodity of debt has degraded the financial health and responsibility of our community.
The solution to this problem is simple: educate people on how to efficiently manage cash flow and avoid the consequences of debt.
It is for this reason A1 Enterprise launched a full marketing campaign for the CARA MoneyCard. We believe that a product such Help Credit Card Debt, Credit Card Debt, How to Reduce Debt, Eliminate Debt, Credit Cards as this is in part a solution to prevent re-occurrences of the extreme debt we now face. Recovery requires several ingredients:
* Educating our younger generation how to manage money and hold them financially responsible for their available cash.
* Put cash control products in place and resurrect the cultural value of spending what you have.
* Give our global community access to a lower cost banking solution with fewer restrictions, limitations, and requirements.
* Give our global community access to banking solutions with lower fees and fewer penalties when accessing cash.
Thank you for taking the time to read this article and support our objective to provide products that stimulate economic health, recovery, and financial responsibility. In sharing our objective with your employer, family, or friends you contribute to this objective and make it possible.
Author Resource:- A1 Enterprise offers this product as a world wide solution. For more information, visit our web site or enroll now.
Article From Articlebliss (Published: June 2009 – Image: www.nurido.at)
