In the News
Healthcare Costs Biggest Threat to Americans' Wealth
As Democrats and Republicans bicker over Obamacare and neither offer a good solution to the problem of resolving the ridiculous healthcare system we have in this country, it is important to point out that medical costs are the reason about one million Americans file bankruptcy each year. Many of these people actually have insurance, but the amount they are asked to pay out of pocket is so high, they just can't pay the 20 percent. Many of them turn to credit cards as a way to keep afloat for awhile, but in the end, the medical debt eats up all their savings and wealth.
This isn't true in other countries, particularly those that have socialized medicine. Republicans treat the phrase as if it were a dirty word, but there are definite advantages to controlling the entire medical sytem (and they don't seem to mind that we have socialized schools, and fire and police departments). Europeans spend 75 percent less than the USA does on healthcare and their citizens get better care. They don't allow doctors and hospitals to charge outrageous sums of money the way that the medical industry in the United States does. In Europe, the medical industry is much more regulated.
Just look at these statistics of the number of people who file bankruptcy as a result of medical debt in other countries every year:
Canada 0 Britain0
USA 1,000,000 plus
As long as the federal and state governments pay Medicare and Medicaid bills without much scrutiny and as long as the insurance companies, doctors and hospitals want to make huge profits and pay their management million dollar salaries, Americans aren't going to be able to afford medical care.
Could New Lending Regulations Devastate American Housing Market?
New federal lending regulations become effective in 2014. These regulations require all lending institutions to thoroughly check every mortgage applicant's credit history, income, expenses and ability to comfortably repay the mortgage loan, insurance and expenses related to home ownership. These regulations are very strict and are a result of the carefree and reckless lending practices that brought the American (and world) economy to its knees in 2009. While it is a very good idea to protect the banking industry and make sure that people can actually pay for their homes, there is a scary side to these regulations. Research has found that almost 50 percent of the people who obtained a mortgage in 2013 wouldn't qualify for a mortgage in 2014 under the new regulations. What is this going to do to the housing market? Will housing prices plummet as homes sit unsold with few people able to qualify for a mortgage? So much of the American economy was built on the idea of living beyond your means, it will be interesting to see what happens when these regulations kick in.
Obamacare's Failure is Not a Surprise to Us in the Budgeting Industry
All of us who work in the personal finance / budgeting / credit industry knew that Obamacare would never work and we were right. We know better than the federal and state politicians and workers that Middle America can't afford to pay huge insurance premiums that cost more than a monthly mortgage or car payment. The cost of living in the United States is so high that most people struggle to pay their regular bills and expenses associated with owning a home or car. Many Americans live paycheck to paycheck, and they aren't considered to be "poor" by federal or state standards, so they don't qualify for Medicaid. So it isn't a surprise to use that the only people really signing up for it are poor or low income. Most people can't afford another monthly bill of $200 to $600 for health insurance.
New Credit Card Complaint Database Now Available
The federal government has launched a database where consumers can complain about credit card companies and read information about complaints others have filed against credit card companies. This information is made available to the public so that consumers can investigate a credit card company more thoroughly before applying for a credit card with that company. Since July 2011, more than 45,000 complaints have been received by the Consumer Finance Protection Bureau, an agency that was set up in 2008 as a result of the Great Recession of 2008. To view the database, click on this link:
Federal Government Needs Your Input on Prepaid Cards
If you are a regular user of the prepaid credit or debit cards, it would be in your best interest to help the government regulate them. Recent federal legislation setting up a consumer watchdog bureau has resulted in a relatively new website, consumerfinance.gov where consumers can get information about financial products and file complaints against companies. Currently they are asking visitors to complete a survey about prepaid cards. Please fill out the survey at this url: http://www.consumerfinance.gov
Help Us Force Experian to Let Consumers See Their Credit Scores
If you have tried to order your FICO credit score at myfico.com, you are probably aware that you can't order your Experian FICO credit score. You can only get your credit scores from Equifax and TransUnion Why? Because greedy Experian wants consumers to buy their credit score at the Experian website. The problem with this is that 90 percent of lenders use the FICO credit score when deciding whether or not to lend money and the score Experian gives you isn't the FICO score. Experian should be forced by federal and state law to let myfico.com sell their credit score so consumers can see it and improve it before they borrow money. This is critical because a difference of 100 points in the credit score can result in paying $40,000 more on a $300,000 mortgage loan. You can find the email addresses of your elected reps at house.gov and senate.gov. Please email them and ask them to "pass a federal law forcing all three credit bureaus to allow FICO to sell their FICO credit scores at myfico.com". While you're at it, you might also ask your elected reps to pass a law requiring the FICO company to give you a free copy of your credit scores once every year.