If you think it’s difficult to understand such financial matters as debt consolidation loans, credit card interest rates, credit scores and mortgage loans, think of how difficult this would be if you didn’t speak English. After all, most English-speaking consumers struggle to understand the fine print that comes with debt consolidation loans or their credit card statements. Those who are either learning to speak English, don’t understand the language at all or primarily speak a different language at home face a monumental task when trying to decipher the late penalties that come with their mortgage payments or the extra fees that come with credit card cash advances.
A New Study
As part of the new Credit CARD Act of 2009, which goes into effect the last week of February, the Government Accountability Office’s Comptroller General must study the relationship between consumers’ English skills and their financial literacy. The study will also look at how U.S. consumers who don’t speak English are impacted by their language skills when they are taking out credit cards, applying for debt consolidation loans or hunting for auto loans. In other words, are non-English speakers shut out of the American banking and lending systems?
A Growing Population
The report is due back by May 22, 2010. It’s a particularly timely report today: The number of people who speak a language at home that is not English grew by 38 percent in the 1980s and by 47 percent in the 1990s, according to a story on this topic by CreditCards.com. This is not a small population, and it is one that is intent on applying for home loans, using credit cards and even consolidating their debt, just like any other group of U.S. consumers. It’s important that these consumers know their rights and the terms of their loans and credit. It’s just one way to prevent them from making bad financial decisions.
Little Room for Debate
You might think that everyone who lives in the United States should learn how to speak English. However, it’s difficult to argue that U.S. residents who don’t shouldn’t be able to attend programs, or have financial statements printed in their primary languages, to help them better understand the financial choices they make. The fact is, if these people take out bad debt consolidation loans, mortgages with unnecessarily high interest rates or shaky personal loans, it hurts everyone. After all, non-English speakers can lose their homes to foreclosure as quickly as can anyone else. And the one thing our fragile economy doesn’t need now is a rise in housing foreclosures that are entirely preventable.