Do you have a list of clients that are Credit Challenged or have Poor Credit Scores?

Do you have new clients that you cannot get them a loan because of their low scores?

Do you have clients that you have to say “sorry we can’t help you”?

NCR Credit Plus will take your potential client’s enroll them into our program. Educated, counsel and get their scores loan worthy for you and your company. Our education information will help your clients get past the fears and doubts he or she has about Credit Restoration.

Every client asks the same kind of questions: “Will this work, how long does it take?”

Credit Restoration is hard work, time consuming, and an ongoing affair. It is against the law to guarantee a time frame it will take to improve or restore anyone’s credit. However, it’s also against the law to not state an “average” time frame that it will take. Our “Average” time frame is 6 months.  We have a number of files each month that are completed within 60-120 days, but those results vary.

How much will my score increase?

Your credit score is compiled directly from both positive and negative entries in your credit report.

* If you have open accounts that you are currently paying on, you should not record a late payment.

* If you do not have accounts you are paying on, then we will help you get some credit established.

* Use of 35% or less of your credit line will boost your score’s

* Avoid a “hard inquiry’s” which can bring about a potential score reduction of five points or more.

* Your credit history accounts for 35% of your score

Here’s what we think you’ll particularly appreciate about our program, and what it offers you:

NCR Credit Plus’s allows you to incorporate our services with your existing and new clients.

If you have a web site (Your Web-Master must add link) you can add a link offering our services.

In-depth updates about all account activity and progress made: We provide specific day/dates.

Identifying all accounts that are being worked on Ex; To Do / In Progress / Deleted / No Change.

Client score’s can be monitor without creating an inquiry.

Our services not only helped your client’s get approved, but also helps them get “lower interest rates.”

NCR Credit Plus success is illustrated by a client retention and track record that speaks for itself.

Please explore our site (www.ncrcreditplus.com), and contact us to receive full details regarding the services offered by NCR Credit Plus, or to answer any questions or concerns you may have.

Question: My wife and I have bought homes and fixed them up for years and would like to start again because we feel the market has hit bottom. We were told that there are no longer financing options for our buyers because these transactions are considered “flips” Are there any loan options out there for this? — Terry

Answer: As of Feb. 1, the Federal Housing Administration has revised its longstanding anti-flipping rule and will once again be providing mortgage insurance to potential buyers of rehabbed or remodeled homes that have been purchased within the past 90 days. Through the past decade, the FHA has banned this practice, but it now has loosened the guidelines in the hopes of stimulating the residential real estate market. In addition, spot portfolio lenders may also consider flipped properties if both the borrower and the equity in the property are strong and represent a low risk.

Question: We are looking at purchasing a new home and have been told that FHA is the only option for people who don’t have a large down payment. But we heard that this soon may be ending. Is that true? — Octavia

Answer: The FHA will continue to offer high loan-to-value financing, but starting April 5, the upfront Mortgage Insurance Premium will increase from 1.75 percent to 2.25 percent. Essentially, this means consumers will have to come up with an additional half percent in closing costs to cover this requirement. I would suggest trying to get an FHA case number prior to this date to avoid paying this increased cost.

Question: We are in the process of purchasing a new home. Our Realtor is telling us that we need to make a decision because the FHA will no longer allow seller concessions. Is this true? — Mary

Answer: That’s not entirely accurate. As I mentioned in my response to the previous question, the FHA is tightening some of its lending standards. The FHA still will allow for seller concessions, but it’s lowering the allowable amount from 6 percent to 3 percent. Many buyers use the 6 percent concession to cover their closings costs, so the reduction will translate into borrowers having to come to the closing with more cash on hand. I suggest you get an FHA case number quickly, before the change takes place.

Question: I completed a short sale for my condo back in June 2009, and I think I was late on two payments by a total of 60 days. I want to purchase another home instead of renting. Will a bank or the FHA lend to me? — Kevin

Answer: The first step you need to take is to pull all three of your credit reports and see how each is reporting the short sale. The FHA has a program that allows for you to short sale your home and then purchase a new home via a new FHA loan if you were current on your mortgage payments for your original home. Typically, most banks shy away from lending to consumers who have had struggles with paying their mortgages in the past, so FHA may be your only option.

Author: Louis Spagnuolo of WCS Lending in Boca Raton  Posted by Paul Owers :http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2010/02/ask_a_real_estate_professional_13.html

If your credit history changes, be prepared for a rate hike in your premiums

Insurance companies base their prices on risk. Drivers under the age of 25 have higher premiums because statistically they are more likely to have an accident.  Homeowners with a burglar alarm system get a discount because they tend to have fewer break-ins.

Okay, this makes sense.  But why do insurance companies consider your credit history when they set your rates?  What does that have to do with their risk?  If I lose my job and my credit score drops, am I really more likely to file a claim?

“Absolutely,” says Kenton Brine with the Property Casualty Insurers Association of America.

Brine admits this doesn’t make much sense to a lot of people.  But he says after 20 years of studies, the insurance industry can “absolutely prove beyond a shadow of a doubt” that credit scoring is correlated to risk of loss.

“It’s more accurate statistically than your driving record,” he says.

The insurance industry points to a study released by the Federal Trade Commission in July of 2007 that looked at credit scores and auto insurance. It concluded:

“(Credit Scores)” effectively predict the number of claims consumers file and the total cost of those claims. Their use is likely to make the price of insurance better match the risk of loss that consumers pose.  Thus, on average, as a result of the use of scores, higher-risk consumers pay higher premiums and lower-risk consumers pay lower premiums.”

In testimony before Congress in 2008, Robert Hunter, director of insurance for the Consumer Federation of America called the FTC study “substandard” because it relied on data “hand-picked by the insurance industry.”

Even so, he notes, the commission found that insurance scoring “likely leads to African-Americans and Hispanics paying relatively more for automobile insurance than non-Hispanic whites and Asians. Hunter told Congress insurance scores are really a “proxy for race” which should not be allowed.

‘Unfair and discriminatory’

Washington State Insurance Commissioner Mike Kreidler says even if there is a link between credit scores and insurance claims, “it’s unfair and discriminatory” to use this information – especially in the current economy. He wants Washington State lawmakers to ban the use of credit history, education and income to set rates. These factors can impact premiums by as much as 50 percent Kreidler says.

Insurance companies don’t use a score provided by one of the big credit bureaus. They create their own “insurance score” using their own criteria. It’s a secret formula; they won’t tell you how your score is computed. In many states, insurance companies aren’t even required to tell customers their credit history was used to set their premium.

“The secrecy behind this credit scoring is part of what makes it so inherently unfair,” Kreidler says. “No two companies use it the same way and when consumers ask, they can’t get a straight answer on how to get a better score.”

The Washington State Insurance Commissioner’s office has received thousands of complaints about this issue over the last few years. People report their rates were increased after the bank lowered their credit limit or canceled their card, or when they consolidated their credit cards, opened new credit card accounts or bought a large ticket item with deferred interest.

Source:By Herb Weisbaum msnbc.com contributor   http://www.msnbc.msn.com/id/35103647/ns/business-consumer_news//

$8,000 First-time Home Buyer Tax Credit at a Glance

* The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
* The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
* The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
* The tax credit applies only to homes priced at $800,000 or less.
* The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
* For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
* For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

* To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
* The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
* The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
* The tax credit applies only to homes priced at $800,000 or less.
* The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
* Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

Who Qualifies for the Extended Credit?

* First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
* Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1. The price of the home.
2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?

No.  The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

for more information visit: http://www.realtor.org/
or: http://www.federalhousingtaxcredit.com/glance.php

Most people look up matters that pertain to their credit score only when it becomes bad enough to be noticed and acted upon by creditors. Even then, the focus stays on improving the score and repairing the credit report rather than finding out what went wrong where. It is very important that you know what really harms your credit report most so you can work at keeping the damage to the minimum even when the circumstances are trying. It is also important that you learn early how to manage your finances in such a manner that you will stay off trouble.

Here are five points that you should try as much as you can to keep off your credit report:

1. Bankruptcy – this often looks like a great relief to you when you’re surrounded by financial chaos. However, you need to know that bankruptcy will stay on credit report for at least 7 years – and this will be visible to your prospective creditors. This is a very long time by any standards. You might like to consider all possible alternatives before declaring bankruptcy. It will be worth the trouble.

2. Foreclosure – this is the term used for the process when a bank repossesses your home because you can not keep up with the payments of the mortgage. This is another negative remark that harms your credit and stays on your credit report for a minimum of 7 years. Any prospective lender who sees that you have a foreclosure on your credit report will immediately list you as a high-risk investment. The terms for credit will be adjusted accordingly – and this will not be to your advantage.

3. Debt collection – debt collections means you have defaulted with your payments long enough for the creditor to hire a debt-collection agency so they can recover their money. This is – as you will realize – not something very encouraging for any future creditor to see on your credit report. This entry tells them that you’re not able to manage your finances well enough to be able to honor your commitments. In such conditions, no creditor will be happy to be associated with you.

4. Lawsuits – in some cases creditors may appeal to court for recovery of their debts. In case a judgment is passed against you, this will be entered into your credit report and kept there for seven years. Needless to say that this is very damaging to your credit score and standing with creditors.

5. Tax lien – this refers to the taxes you ought to pay for your home or any similar property. In case you fail to pay your tax dues, the Government might auction your property to recover these taxes. Unpaid tax liens remain on your credit report for 15 long years. Even when your property is auctioned for recovery of taxes, you will still be responsible for timely payment of the mortgage until fully liquidated.

You need to work hard to keep these entries off your credit report. These can harm your credit score and sabotage your ability to avail loans as the creditors will perceive you as high-risk investment. This is why prevention is better than cure – learn to manage your finances well so you will avoid the pitfalls of bad financial management.

NEW YORK (CNNMoney.com) — If you want to refinance your mortgage into a loan with a sub-5% interest rate, better hurry. Your window of opportunity is closing fast.

Lenders are still advertising rock-bottom interest rates, but for most borrowers, rates are rapidly rising into the 5%-plus category.

During the week of Jan. 7, the average 30-year, fixed-rate loan closed at 5.09%, according to mortgage giant Freddie Mac. That is significantly higher than the 4.71% it averaged at the beginning of the month, and experts say rates will go higher yet.

“Interest rates are up and they’re not going to go down below 5% again,” said Mark Zandi, chief economist for Moody’s Economy.com, not for a while at least.

While homebuyers are still excited about these low mortgage rates, people who already have a loan and want to lower their costs are scrambling to lock in.

Refinancers act when the difference between the rate they’re currently paying and the new one is at least a point or two wide, otherwise the costs of going through the refinancing wipes out any savings. In fact as rates rose in December, refinancings plunged, down more than 30%, according to the Mortgage Bankers Association.

A big reason for the jump is that a government program that has kept rates very low is winding to a close. The Federal Reserve has been purchasing mortgage-backed securities since early 2009, scooping up as much as $1.25 trillion worth. That has dampened rate increases by providing a ready market for the securities.  But the Fed’s program lapses on March 31, when it cedes the playing field to private investors, who will almost surely demand higher rates. The Fed has already been slowing its purchasing, and that has corresponded with the recent rate increases.
As Treasurys go . . .

Not just mortgage rates have turned north. Treasury yields have as well, another indication that mortgage rates are headed skyward.

The yield on the benchmark 10-year Treasury has grown steeply over the past few weeks. It stood at 3.2% at the beginning of December and has soared to 3.84% as of Tuesday, a 20% jump. Mortgage interest does not track Treasury yields in lockstep, but the two tend to mirror each other’s movements.

Mortgage securities rates are always higher than Treasury yields because investors demand a premium above practically risk-free Treasurys.

The difference between mortgage rates and Treasury yields is usually somewhere near 1.7 percentage points, according to Keith Gumbinger of HSH Associated, a publisher of mortgage information. The current spread of about 1.2 percentage points is quite narrow. That’s bound to change, according to David Crowe, chief economist for the National Association of Home Builders. He believes mortgage rates will go up to about 5.5% by late summer. But other factors could push them into a larger-than-expected jump.
Economy bouncing back

For example, as the economy improves (it’s hoped), businesses will expand production, hire new workers and open new sales outlets. All that requires borrowing in capital markets and the demand for lending will expand interest rates of all kinds.

A recovering economy also boosts corporate profits, making stocks a better bet for investors.

“Stocks tend to do better when the economy improves,” said Stuart Hoffman, chief economist for PNC Financial Services. “Mortgage rates will rise to attract investment.”

Hoffman’s forecast is for rates to stay quite constant the rest of the winter and then elevate gradually during the spring buying season, the busiest time of year for home sales. He said they should hit about 5.5% by the end of June.

After that, the increases will slow, according to Hoffman, but still approach 6% toward the end of the year. He believes they’ll cap at around 5.75% and are not likely to fall back to the 5% level again.

Giving gift cards this year? Hope to get one? Receive One?

Like it or not, gift cards are now a fixture of the holiday season. And this year, some of the changes in the card world seem favorable at first glance.

Nearly $5 billion of the money that is given this year as presents on gift cards is likely to go unspent.

Last month, the Federal Reserve proposed new guidelines for the industry, rules that legislators had outlined in the sweeping credit card legislation that passed earlier this year. They prohibit fees for cards that have been inactive for less than a year, outlaw expiration of funds within five years of when someone has loaded the cards with money, and call for clear and conspicuous disclosures.

That is fine as far as it goes, though most major retailers already follow these rules. American Express, which issues cards that are good at any retailer that accepts its plastic, went even further. It did away with all consumer fees, other than the ones you pay to purchase and load the gift card in the first place.

But a big problem remains, and it’s awfully hard to legislate away. This year, nearly $5 billion of the money that well-meaning givers have put onto gift cards will go unspent, according to TowerGroup, a financial services consulting firm. The money then reverts back mostly to the retailers and banks that loaded the plastic initially.

In the industry, this is known as breakage, and here’s what it means: If you buy a gift card for a family member or friend, there’s a good chance you’ll give a little gift to the retailer or bank that issued it as well.

How does breakage happen? People lose their cards. Or they abandon them in a drawer and assume they’re expired when they’re unearthed years later. Fees can still eat away at some of them. And people may use $46 of a $50 card and then throw it out rather than make another trip back to the store.

The most obvious question here is whether retailers and banks like it when this happens. On one hand, enlightened companies may see the cards as akin to frequent-flier miles. Customers are unhappy when any miles expire, and if they are able to redeem them easily, they’re more likely to patronize the airline and collect more miles in the future. That’s how loyalty works, and one would assume that gift card issuers want to create the same seamless experience.

Some third-party providers that set up gift card systems see it a bit differently, however. Head over to the Gift Card USA home page, and you’ll see the company behind the site announcing: “Experience shows that 5-15% of gift card values are never redeemed. This fact can pay for your program by itself.”

It isn’t just a break-even proposition either, according to the people behind Acceptvisamastercards.com. If you count 10 to 12 percent breakage in your calculations, the site contends, the gift card display can become the “most profitable square foot of space in the place.”

This is how some of the people in the industry talk about gift cards when they think consumers aren’t listening. And for big companies, breakage can add up to real money. Not every big retailer or bank discloses it, but Best Buy was kind enough to note that it kept $38 million in breakage in its most recent fiscal year. Home Depot cleared $37 million. Breakage can be total when a retailer goes out of business.

Retailers will generally still let you redeem your gift card many years after you received it. But they still record the revenue once they’re certain, based on historical redemption patterns, that most of the unspent money from years ago will stay that way. And yes, most of them do tend to keep it, though some states may try to seize the money as unclaimed property (which leads many companies to place subsidiaries in friendly states to try to avoid this).

Even as gift cards exploded in popularity over the last decade, it was reasonably easy to avoid getting them, as long as you put together a specific enough holiday wish list for friends and family. But recently, companies have started sending rebates in the form of gift cards, instead of old-fashioned paper checks. So you may end up with the cards whether you want them or not.

Why is this happening? Because you wanted it to happen, of course. “It’s the convenience,” said Cletis Hoffer, treasurer at Young America, a marketing company that specializes in rebates and has studied the issue in focus groups. “Consumers are more interested in getting a card than a check. You have to take a check to the bank. But with a card, you can spend it immediately.”

This makes little sense to me. I can drop a check in the mail to my bank in about two minutes. But with the gift card like the Citi Visa that I recently received from Verizon, I have to remember to put it in my wallet and take it out at a store. Then, I need to find a retailer where the people at the register won’t look at me cross-eyed when I request that they split the transaction between the gift card and another form of payment. It holds up the line, too.

At least that Citi card gives you the right to take its gift card to any Visa member bank and extract the cash. I took it to archrival Chase. The transaction was seamless and it took just 10 minutes, five times as long as it would have for me to send a rebate check to my bank. I was that lucky, though, only because I work across the street from a bank.

Perhaps I’m in the minority in finding all of this a bit too complicated. “We have seen incredible increased utilization, in terms of people getting the cards down to zero, than we were two years ago,” Mr. Hoffer said. “Particularly the Visa and other cards.”

Brian Riley, the research director at TowerGroup, confirms that overall breakage numbers have fallen in the last year or two, as consumers have gotten wise to the disappearing funds. “People realize they can lose it,” he said. “And the fact that we’re in a bad economy gives the $3 a bit more meaning now.”

If you do end up with an unwanted card, there are a few ways to get rid of it. You could sell or swap it at Web sites like Plastic Jungle, GiftCardRescue and Swapagift, though you’ll lose some of the card’s value in the process. A charity might take it off your hands, too.

If you’re going to use the card, try buying something that costs a bit more than the loaded amount, so you’re not faced with a tiny leftover balance that you’ll be tempted to abandon. If you have a Visa or similar card, calling a catalog merchant with an order may make you feel less sheepish than holding up lines with an in-person split transaction.

As a giver, it’s easy to tune all of this out when buying a card is so much easier than redeeming it. And recipients often treat it like found money; what’s a loss of $4 when the $96 you did get to use was money you didn’t have before?

But we could put an end to all of this waste if the givers got wise to the billions in annual giveaways to retailers and banks and just handed over cash. You’re kidding yourself if you think that loading money onto a plastic card is somehow more polite than slipping money into a paper envelope.

Nobody neglects to spend cash. The reason they came up with the word breakage is that the gift card system was more than a little bit broken.

Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name.

Mitch Goldstone, in his digital photo-processing shop in Irvine, Calif., is part of a suit against Visa and MasterCard.

“Smart retailers take advantage and offer a ‘discount’ on debit purchases. Sharing the savings with customers is a great incentive.”

It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake.When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code.

The difference is so large that Costco will not allow you to sign for your debit purchase in its checkout lines. Wal-Mart and Home Depot steer customers to use a PIN, the debit card norm outside the United States.

Despite all this, signature debit cards dominate debit use in this country, accounting for 61 percent of all such transactions, even though PIN debit cards are less expensive and less vulnerable to fraud.

How this came to be is largely a result of a successful if controversial strategy hatched decades ago by Visa, the dominant payment network for credit and debit cards. It is an approach that has benefited Visa and the nation’s banks at the expense of merchants and, some argue, consumers.

Competition, of course, usually forces prices lower. But for payment networks like Visa and MasterCard, competition in the card business is more about winning over banks that actually issue the cards than consumers who use them. Visa and MasterCard set the fees that merchants must pay the cardholder’s bank. And higher fees mean higher profits for banks, even if it means that merchants shift the cost to consumers.

Seizing on this odd twist, Visa enticed banks to embrace signature debit — the higher-priced method of handling debit cards — and turned over the fees to banks as an incentive to issue more Visa cards. At least initially, MasterCard and other rivals promoted PIN debit instead.

As debit cards became the preferred plastic in American wallets, Visa has turned its attention to PIN debit too and increased its market share even more. And it has succeeded — not by lowering the fees that merchants pay, but often by pushing them up, making its bank customers happier.

In an effort to catch up, MasterCard and other rivals eventually raised fees on debit cards too, sometimes higher than Visa, to try to woo bank customers back.

“What we witnessed was truly a perverse form of competition,” said Ronald Congemi, the former chief executive of Star Systems, one of the regional PIN-based networks that has struggled to compete with Visa. “They competed on the basis of raising prices. What other industry do you know that gets away with that?”

Visa has managed to dominate the debit landscape despite more than a decade of litigation and antitrust investigations into high fees and anticompetitive behavior, including a settlement in 2003 in which Visa paid $2 billion that some predicted would inject more competition into the debit industry.

Yet today, Visa has a commanding lead in signature debit in the United States, with a 73 percent share. Its share of the domestic PIN debit market is smaller but growing, at 42 percent, making Visa the biggest PIN network, according to The Nilson Report, an industry newsletter.

The Risk of Refusing

Critics complain that Visa does not fight fair, and that it used its market power to force merchants to accept higher costs for debit cards. Merchants say they cannot refuse Visa cards because it would result in lower sales.

“A dollar is no longer a dollar in this country,” said Mallory Duncan, senior vice president of the National Retail Federation, a trade association. “It’s a Visa dollar. It’s only worth 99 cents because they take a piece of every one.”

Visa officials say its critics are griping about debit products that have transformed the nation’s payment system, adding convenience for consumers and higher sales for merchants, while cutting the hassle and expense of dealing with cash and checks. In recent years, New York cabbies and McDonald’s restaurants are among those reporting higher sales as a result of accepting plastic.

“At times we have a perspective problem,” said William M. Sheedy, Visa’s president for the Americas. “Debit has become so mainstream, some of the people who have benefited have lost sight of what their business model was, what their cost structure was.”

Visa officials said the costs of debit for merchants had not gone down because the cards now provided greater value than they did five or 10 years ago. The costs must not be too onerous, they say, because merchant acceptance has doubled in the last decade.

The fees are “not a cost-based calculation, but a value-based calculation,” said Elizabeth Buse, Visa’s global head of product.

As for Visa’s market share, company officials maintain that it is rather small when considered within the larger context of all payments, where, for now at least, cash remains king.

While Visa may be among the best-known brands in the world, how it operates is a mystery to many consumers.

Visa does not distribute credit or debit cards, nor does it provide credit so consumers can buy flat-screen televisions or a Starbucks latte. Those tasks are left to the banks, which owned Visa until it went public in 2008.

In Down Real-Estate Market, Homeowners Are Deciding to Abandon Their Loan Obligations Even if They Can Afford the Payments

PHOENIX — Should I stay or should I go? That is the question more Americans are asking as the housing market continues to drag.

In good times, it would have been unthinkable to stop paying the mortgage. But for Derek Figg, a 30-year-old software engineer, it now seems like the best option.

Mr. Figg felt trapped in a home he bought two years ago in the Phoenix suburb of Tempe for $340,000. He still owes about $318,000 but figures the home’s value has dropped to $230,000 or less. After agonizing over the pros and cons, he decided recently to stop making loan payments, even though he can afford them. Mr. Figg plans to rent an apartment nearby, saving about $700 a month.

A growing number of people in Arizona, California, Florida and Nevada, where home prices have plunged, are considering what is known as a “strategic default,” walking away from their mortgages not out of necessity but because they believe it is in their best financial interests.

A standard mortgage-loan document reads, “I promise to pay” the amount borrowed plus interest, and some people say that promise should remain good even if it is no longer convenient.

George Brenkert, a professor of business ethics at Georgetown University, says borrowers who can pay — and weren’t deceived by the lender about the nature of the loan — have a moral responsibility to keep paying. It would be disastrous for the economy if Americans concluded they were free to walk away from such commitments, he says.

Developments: Is Walking Away FromYour Mortgage Immoral?

Walking away isn’t risk-free. A foreclosure stays on a consumer’s credit record for seven years and can send a credit score (based on a scale of 300 to 850) plunging by as much as 160 points, according to Fair Isaac Corp., which provides tools for analyzing credit records. A lower credit score means auto and other loans are likely to come with much higher interest rates, and credit card issuers may charge more interest or refuse to issue a card.

In addition, many states give lenders varying degrees of scope to seize bank deposits, cars or other assets of people who default on mortgages.

Even so, in neighborhoods with high concentrations of foreclosures, “it’s going to be really difficult to prevent a cascade effect” as one strategic default emboldens others to take that drastic step, says Paola Sapienza, a professor of finance at Northwestern University. A study by researchers at Northwestern and the University of Chicago found that as many as one in four defaults may be strategic.

Driving this phenomenon is the rising number of households that are deeply “under water,” owing much more than the current value of their homes. First American CoreLogic, a real-estate information company, estimates that 5.3 million U.S. households have mortgage balances at least 20% higher than their homes’ value, and 2.2 million of those households are at least 50% under water. The problem is concentrated in Arizona, California, Florida, Michigan and Nevada.

Josh Cotner, who owns an insurance agency, says his mortgage balance is about $100,000 more than the market value of his home in Gilbert, Ariz. Mr. Cotner could rent a bigger home nearby for $600 a month, far below the $1,655 he now pays on his mortgage, home insurance and property tax. He says he recently stopped making mortgage payments because his lender wouldn’t help him reduce the principal on his loan under a federal program in which he believes he is qualified to participate. Given the sometimes lengthy legal process of foreclosure, he may be able to stay in the home for at least another nine months without making any payments.

Banks warn they may get tough with strategic defaulters by pursuing legal claims on a borrower’s other assets. “We will try to reduce people’s payments if they have a hardship,” says Thomas Kelly, a spokesman for J.P. Morgan Chase & Co. “But we have a financial responsibility to get people to pay what they owe if they can afford it.”

Steven Olson, a loan officer and roof installer in Roseville, Minn., defaulted in 2007 on a plot of land in Florida he had bought as an investment. “I thought I could move on with my life,” he says. But the lender, RBC Bank, a subsidiary of Royal Bank of Canada, sued him, seeking to make him pay more than $400,000 to the bank to cover its losses on the loan. Mr. Olson has hired a Florida lawyer, Roy Oppenheim, to resist the claim. An RBC spokesman declined to comment.

The Burning Questions

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