We are a society buried in debt, that wants to get out of debt. Now the debt peddlers and predators are coming at us with something called an MMA or "Money Merge Account". They actually have the audacity to try to convince people that they can pay off their mortgage faster with a line of credit and some software. Unfortunately, they are succeeding in convincing some people.

Its like so many things. Too good to be true.

Do something for me. Just a favor that will really help you more than me. Take your right hand, extend it out in front of you and look at your palm. Now, take that same hand and hit yourself in the head as hard as you can. Do this repeatedly while chanting "I will not buy stupid stuff, I will not buy stupid stuff". Don't you feel better?

What these accounts do is is use all of your extra income during the course of the month to pay down your mortgage. Let me explain a little better.

Lets examine a $200,000 mortgage at 6% annually. Lets assume you take home $5000 per month and have $4000 dollars per month in expenses - leaving you with $1000 at the end of the month after the bills are paid.

You would deposit your entire paycheck into the loan amount each month via direct deposit. This would reduce your balance to $195,000 - but only temporarily. As you withdrew money throughout the month to pay your bills the balance would go back up. But because you have $1000 left over at the end of the month - you would still reduce the balance by $1000. In addition you would save the interest that you would have paid by having a lower loan balance throughout the month. For this service, the company selling/administering the MMA would charge you a fee of $3500 to $5000.

Lets take a look at what is really happening here.

By having your loan balance constantly decreased by approximately $4000, you save about $20 per month in interest. In addition by leaving your extra $1000 (the amount that you have left over at the end of the month anyway) in the account, you decrease the principal by an extra $1000 per month. This saves you about $380 dollars a year.

Are you keeping track. You save $240 dollars per year, plus an additional $380 per year for a total savings of $620 dollars per year. So, in order to save you $620 dollars per year, they charge you $3500 to $5000 dollars. At that rate it would take you 5 to 8 years just to recoup the cost of the software and the account.

Lets be pragmatic. The real savings here is that you leave all of your extra money (in the case of our example $1000) every month in the account, thereby paying down the principal by $12000 per year. You don't need any software, or any company to pay down your account by $1000 per month. You can do it just fine on your own and the results are the same.

Using our example your mortgage would be paid off in about 10.5 years. If you just pay an additional $1000 per month on your mortgage your mortgage will be paid of in about, oh, 10.5 years. And you can do this without spending $3500 to $5000 of your hard earned money for a piece of scam software. In fact, if you have $3500 to $5000 to spend - just pay down your mortgage or credit card debt.

Use your money wisely, get out of debt, stay out of debt and get on with your life.