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In March Congress passed vast legislation that would dramatically impact the national personal bankruptcy laws if signed by President Bush, who supports its enactment. Following are a few questions and answers about the changes.
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Consumers wise up to debt by switching credit cards
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More than 5 million people have missed monthly credit card payments in the past six months, according to research from MoneyExpert - a two per cent increase on the previous six months.
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More than three million people are planning to switch an average balance of £2,666 onto new credit cards in the first three months of 2008 according to research from Abbey.
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Mastercard is to scrap its cross-border fee payments in Europe after a new ruling from the European Commission ordered the credit card company to abandon its fee charging, saving consumers and retailers billions of pounds.
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Britain faces another Christmas on credit as UK shoppers prepare to spend an incredible £2.1 billion on their credit cards in a last minute Christmas shopping spree.
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The first class is required for finance majors; the second is one of several that non-finance business majors can choose from; Me and My Money is an elective, regardless of field of study What role credit cards play in the classes: "The primary emphasis of each class is different, but with respect to credit, we hope all students will take away sound debt-management principles and realize that problems are easily created that may take years to rectify," says professor David Dumpe. Students learn how to calculate the length of time it will take to pay off a $3,000 credit card balance at 22 percent interest if they only make the minimum payment and don't charge anything else. (The answer, says Dumpe: "It usually ends up being close to 13 years. It will be longer if the minimum payment decreases as the outstanding balance decreases.")
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What role credit cards play in the class: Professors and spouses Dave and Mary Emery rotate teaching this class. Their course covers "credit cards, the various penalties imposed, the unilateral contract nature of credit cards, and then we have students evaluate two or three credit card offers to pick out the 'best' deal," says Dave. A banker also visits the class to talk about the wise use of credit, good debt and bad debt, and the importance of building a good credit score. The big lesson the Emery's teach, however, has nothing to do with paperwork, but behavior and human nature. "Don't sign any financial deal -- loan, investment, credit card, purchase agreement, mortgage, etc., until you understand it," Dave stresses, when asked about the one lesson he hopes students take away from the class.
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What role credit cards play in the class: "My goal is that over the 15-week course, students develop a facility with or mastery of their own money," says Stuart Clymer, who teaches the class at this Jesuit university. I'm always amazed at how much credit card debt my students have already accumulated. "Support and enthusiasm for financial education varies widely among campuses, but the issues surrounding credit often captures the attention of students, staff, parents, alumni, donors, and state legislatures," says NEFE Director of Strategic Programs and Alliances Brent A. Neiser in testimony before a House subcommittee on consumer credit on June 26, 2008.
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Clymer, a financial planner with an MBA, suggests to students -- mostly juniors and seniors -- that they set a limit to what they'll add on their credit card each week and keep the number of credit cards they possess down to one. Clymer says there are several exciting things the students do, including preparing a personal financial plan and presenting a term paper on "The Energy of Money: A Spiritual Guide to Financial and Personal Fulfillment," by Maria Nemeth. Clymer's main mantra for his students? "Stay spending sober!"
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