Irresponsible Spending Has Little Influence on Credit Card Debt

Jun 09, 2014

Amy Truab, a senior analyst and report author with The Debt Disparity, has published a story: What Drives Credit Card Debt in America. According to their research, low and middle-income households suffer from debt by way of children and lack of health insurance. Wrap it up with some unemployment and BAM…. You have credit card debt.

Well that makes sense

Things always happen at once. When the job that you love ends, the kids get sick or the spouse comes down with an illness. Sometimes there is a savings account to roll over and rely on, and sometimes there’s not. That’s when the credit card comes to the rescue. Sometimes, it’s the only thing a family has to rely on.

The survey says

•Households with no insurance for a three-year period are 20 percent more likely to be using a credit card.

•Those that have kids under the age of 18 are more likely to have a card and more likely to use it compared to childless homes.

•Homes with families that have been jobless in the last three years for a period of 2 months or more are 14 percent more likely to be carrying a credit card.

It also states

That households with children are no less responsible than those without children. Their income just does not stretch as far as those other families. The plastic safety net that some have, are ALL that they have. The survey found that most American families are taking good care of their finances and they just are strapped because of the slow economic growth and the cost of overall spending required to keep a home running. With high-risk credit card processing, it makes it more difficult to make the ends meet and without the card, some families would not make it month to month.

The Debt Disparity says:

“Instead we see that, among similarly situated low- and middle-income households of working age, factors like education, the value of assets to fall back on, insurance coverage, and whether a household member has lost a job are among the foremost predictors of whether a household will accumulate credit card debt.”

Common sense

After the collapse of the American economy, people learned quickly what was needed and what was wanted. Things that were wanted were left in the store and things that were needed for survival made their way home. Now, several years later, that new education has stuck with people. The credit card only comes out when things are really needed and they make sure they can make the payments before they incur the cost.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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