Avoiding the Debt Trap
It has to stop. Today interest rates on savings accounts near 0% at traditional banks while they lend at 25% or more with credit cards. All while, things like rent, tuition costs and mortgages keep climbing faster than the rate of inflation – in other words the cost of living keeps rising and the debt keeps growing.
We all know someone who is buckling under debt, but it’s a wider problem. For example, according to the New York Fed Consumer Credit Panel, pre-pandemic household debt in the United States reached a staggering record high at the beginning of 2020 at US$14.3 trillion. While in the EU, the latest reports show EU household debt has reached US$7,500 billion by the end of 2020. It’s crazy.
Minimum Payments – Danger! For those struggling, their credit cards offer a “lifeline” but paying the minimum payment is a path to financial ruin. Behavioral scientists have proven that having minimum payments on credit card bills actually lowers people’s willingness to pay off their bills and thus, drives additional interest charges – driving significant profits for banks.
Banks operate on what they call the “spread.” What they charge to lend versus what they pay depositors. What is in the middle is their profit – and they are focused on growing profits. In 2018, banks globally made $1 Trillion in profits. They make money off you, not for you!
At hi, we are looking to change that.
It’s all about choices. Banks make choices and so do you.
Better Than Better – Different
At hi, we are leveraging blockchain technology to build a membership ecosystem of services that treats our members as key stakeholders. Our community powered business model has been tried and tested for generations by credit unions – they typically offer higher interest rates on savings and lower interest rates on loans. As a result, hi products and services are provided to our members on a no added fees and no mark-up basis. Sounds good, right?
That means interest rates on any deposits not seen in the traditional banking world – we put your money to work for you, instead of for your bank!