Apply for a Credit Card

You’ve probably heard the old joke that a weekly budget is just something to help you explain why the money ran out about Tuesday. To small business owners, keeping a lid on costs is no joke. Consequently, small business owners are ever vigilant about cutting corners to make ends meet.
One way to stretch your small business budget is through vendor savings programs. More commonly known as reward and/or discount vendor programs, vendor savings programs are offered by business credit card providers to help small business owners save money on necessary purchases. With them, you get everything from free travel to cash back, helping you to grow your small business more efficiently.

Cash Back

Most of the major credit card companies offer programs that will fit your small business needs. For example, the American Express OPEN Small Business Network offers up to 5 percent cash back that can add up if you consider you might spend $10,000 over the course of a year. Doing so would net you $500 in cold hard cash - not bad for the cost of doing business. What’s more, cash-back bonuses can generally be applied directly to various vendor accounts, allowing you to use your cash-back rewards for such things as paying your phone bill.

Business Debits

MasterCard offers its small business customers a MasterCard Cash Rewards program via its Debit MasterCard BusinessCard. The card provides cash-back offers to support small business debit cardholder activation efforts, while also providing usage-incentives for infrequent card-users. Additionally, they offer creative services targeted to business card users, such as help in developing customized direct mail packages in which they will handle rewards fulfillment and cover postage costs for users. The card also provides targeted discounts at a number of leading business merchandise providers, such as Office Depot, Pennywise.com, The New York Times and IBM.

They also allow Debit MasterCard BusinessCard cardholders to earn one reward point for every $2 in small business debit, signature purchase transactions. Equally important, according to a company statement, is the feature that allows cardholders to combine points earned from Debit MasterCard BusinessCard transactions with purchases made with personal MasterCard debit cards, accelerating your ability to accumulate points. In addition to free air travel on any airline with no blackout dates and built-in extras (e.g. free travel insurance), points can be redeemed for electronics, hotel stays and travel packages, as well as discounts at Home Depot, Office Max and Best Buy, among others.

Outside the Box

If you really want to get creative when it comes to leveraging these types of programs, you might consider using some of the available rewards as employee incentives. Giving free mileage or gift merchandize to staff members to reward their hard work is sure to boost morale, enhance loyalty and garner you some good will, which is sure to come in handy at some point.

Finally, consider the fact that using a business card to save money and earn discounts can also help you manage cash flow and streamline accounting paperwork, which frees up your time so you can concentrate on growing your small business by leaps and bounds. That, small business owners might agree, is the biggest reward.

Share This

Managing Your Credit Debt

Buy now and pay later. It’s become the American way. There’s no doubt that a credit card can be a powerful and useful tool. However, as more and more Americans discover every year, too much of a good thing can lead to big trouble.

According to CardWeb.com, the average American family owes over $8,000 in credit card debt. Remember, this is an average. For every family that’s way below this average, there’s another family that’s way above the average. Where you fall in relation to this average can help you determine exactly how serious a problem your credit card debt really is.

It’s important to recognize that no matter what you do, you’re not going to get out of credit card debt over night. It probably took you several years to accumulate the debt you have now, so it’s understandably going to take you some time to get this debt under control. The good news is that as soon as you start, you’ll begin to see both financial and psychological benefits.

Change your spending habits

The first step in gaining control over your credit card debt is understanding how you use your credit cards. Do you save them for unusual expenses like automobile repairs and medical bills? Or do you routinely find yourself reaching for your credit card to pay for a TV Guide, a bag of Cheese Doodles, and a bottle of shampoo?

If you use your credit cards to pay for simple, everyday items, your debt is sure to creep up. You should make a commitment to reserve your credit cards for significant and/or unexpected expenses.

Stop using all your cards

Once you’ve established smart usage guidelines for your credit cards, you need to apply those guidelines. In other words, stop using your credit cards. This may seem obvious, but it’s the most important step you can take to reduce your credit card debt.

Do you have any cards that are maxed out? Cut them up into little pieces. After all, they’re of no real use to you. They only represent temptation every time you get a few dollars paid down.

Each time you look at your credit card statement, you probably grumble over the fact that a huge portion of your minimum payment was applied to interest, reducing your actual balance by only a small amount. The way to combat this effect is to pay more than the minimum amount. Even if you can only pay $10 extra each month, this is an important step, because every extra dollar you pay is applied to your balance. You’ll be surprised at how quickly your balance begins to drop.

Transfer balances to Lower-interest credit cards

One popular approach is to transfer your high-interest credit card debt to some lower-interest loan - either a home equity loan or a low-interest card. This can save you a lot in interest, but be careful. This strategy requires quite a bit of discipline.

If, for example, you use a home equity loan to pay off your credit cards, the only thing keeping you from running those credit cards back up is your own will power. If you’re careless, you could find yourself in a worse position than you were before - maybe even with your home ownership in jeopardy.
The rise in credit card debt has also given rise to the so-called credit counseling industry. These firms promise to negotiate with your creditors for reduced interest and payments. While some of these firms are better than others, it’s important to note that your creditors are not legally required to negotiate with these firms. Most creditors will negotiate because they know the alternative - bankruptcy.

File for Bankruptcy only as a last resort

Bankruptcy should be used only in the most extreme cases. While having your credit card debt completely erased may seem tempting, bankruptcy has several long-term, negative effects. The most obvious is that your credit is essentially ruined for several years, meaning it will be difficult if not impossible to obtain credit even when you really need it.

This may not seem so bad, since your goal is to get out of credit card debt anyway. However, on a more practical level, bankruptcy means having to live completely on an all-cash basis. If the car breaks down, you either pay cash or don’t get it fixed. When it’s back-to-school time, you either write a check for the kids’ new clothes or send them to class in worn-out items from last year.

Once you get your credit card debt under control, it’s just as important to keep it under control. The popular thinking is that you should never charge more than you can pay off at the end of the month. This is, of course, easier said than done.

A more practical approach is to impose your own limit on each card, regardless of its actual limit. For example, if your card has a limit of $2,000, you may choose to impose your own limit of $850. That way, you’ll always have your credit card debt under control, and you’ll have plenty of cushion in case of emergency.

Share This

Although at times it seems as if the credit card companies have dominance over everyone, Congress continues to remind us that they have the final say in the way things are run. With Congress looking at several issues that deals with credit card companies, there is sure to be some kind of regulations on policies in the coming years.

As the internet continues to develop, more and more people are using credit cards for an array of different things. Credit cards are used for everything from purchasing clothes or computers online to gambling and online auctions. With the freedom that is allowed thus far, Congress is bound to step in and begin regulating online policies.

One way Congress is helping people with credit cards right now is through the fair debt collection practices act. This is a law that was passed by Congress which regulates the methods collection agencies can use to collect money from debtors behind on their payments. For instance, collection agencies are not allowed to contact relatives or employers of a debtor, and they are not allowed to contact the debtor by phone before 8 a.m. or after 9 p.m.

While it is vital that you try and pay off as much of your debt as possible, sometimes debt piles up on you. With the FDCPA, it allows you to buy some time try to come up with the money without legally being contacted if you choose not to pick up the phone. If any collection agency does break any of the rules set, you have the ability to take them to court.

One of the main areas of concern for Congress is internet fraud and identity theft. Through online auctions, gambling and online stores there are thousands of credit card transactions a day. However, there are also hundreds of reported identity thefts around the world every day. In fact, identity theft has climbed to the number one crime in the U.S.

Congress continues to look into what protection online sites are providing their customer with and what regulations they are going to have to make. The further the internet develops, the more websites are going to have to adjust to fit the needs of their customers. While things are alright at the time being, many sites won’t be good enough in time with a growing number of people purchasing items online.

What types of regulations Congress will make to protect you and your credit card is still unclear. There has been continuous research and discussions regarding how Congress will make things safer online and only time will tell what types of regulations they set.

Share This

Identity Theft occurs all the time

“I don’t remember charging those items. I’ve never even been in that store.” Maybe you never did charge those goods and services, but someone else did, someone who used your name and personal information to commit fraud.

When imposters take your name, Social Security number, credit card number, or some other piece of your personal information for their use, they are committing a crime. Identity theft is the fastest growing financial crime. One of the first things the FBI discovered about the September 11 hijackers was that as many as half a dozen were using credit cards and driver’s licenses with identities lifted from stolen or forged passports.

If you care at all about the privacy of your financial information, your credit history, your portfolio, your charge card numbers, you can protect yourself from criminals determined to exploit that information. The theft can be as simple as someone stealing your credit card number and then charging merchandise to your account. The situation can also be as elaborate as a thief using your name, birth date, and Social Security number to take ownership of your credit card and bank accounts, or even set up new ones.
People who place their Social Security and driver’s license numbers on their checks are making identity theft fairly easy. With one check, a con artist could know your Social Security, driver’s license, and bank account numbers as well as your address, phone number, and perhaps even a sample of your signature.

Types of Identity Theft

Identity fraud can range from passing bad checks and using stolen credit cards to taking over another person’s total financial existence. While situations as portrayed in the movie The Net are indeed rare, people do need to be aware that they can easily become a victim. The ease of obtaining Social Security numbers from more than 3 billion credit solicitations a year make identity theft a fairly simple scam. Each day, more than a 1,000 people have their identities stolen by a con artist applying for credit in the victims’ name. After obtaining a loan or running up credit card charges, the thief typically disappears never to be seen again, and leaving a ruined credit rating that may take years to correct. Protect Yourself from Identity thiefs

Protect Yourself from Identity thiefs

Banks and other financial institutions work to protect the identities and privacy of their customers. Customers are constantly reminded that the slight inconvenience of being asked for identification, or having an account balance checked, may protect you and others from financial losses.
Efforts to protect yourself from identity fraud may include the following:

* Shred or burn financial information containing account or Social Security numbers;
* Use passwords other than maiden names;
* Don’t put your Social Security number on any document unless it is legally required;
* Check your credit report once or twice a year to make sure it is correct;
* Have your name removed form mailing lists operated by credit agencies and companies offering credit promotions;
* If you become a victim, notify the credit card company and other businesses with specific details. Also, file a police report to provide documentation of the scam.

If your identity has been taken, you’re first likely to learn about it when checks start bouncing or a collection agency begins calling. The damage isn’t so much in dollars, since the financial institutions are liable for the unauthorized charges. Rather, the fallout may include a checkered credit history, which could prevent you from getting a mortgage or a job not to mention the countless phone calls and piles of paperwork you’ll need to go through to correct the situation. Guarding against identity theft is much like locking the door and activating the burglar alarm when you leave your home. By and large, the crime is a low-tech operation, despite well-publicized instances of hackers breaking into websites and stealing millions of credit card numbers. Usually, someone fishes a bank statement or credit card offer out of your trash, or a dishonest employee peeks at your personnel file.

To protect yourself, you may want to sign up for a credit monitoring service. At $40 a year, Credit Watch from Equifax is a bargain. The company scans your credit report every night and sends you an email alerting you to ay activity, such as a new credit card issued in your name or credit check by a car dealership. The price includes six full credit reports a year.

Report Identity Theft

If someone has stolen your identity, the Federal Trade Commission recommends that you take three actions immediately:

* Contact the fraud departments of each of the three major credit bureaus. Tell them to flag your file with a fraud alert, including a statement that creditors should call you for permission before they open any new accounts in your name.
* Contact the creditors for any accounts that have been tampered with or opened fraudulently. Ask to speak with someone in the security or fraud department, and follow up in writing.
* File a police report. Keep a copy in case your creditors need proof of the crime.
* If, after taking all these steps, you are still having identity problems, stay alert to new instances of identity theft. Notify the company or creditor immediately, and follow up in writing. Also, contact the Privacy Rights Clearinghouse, which provides information on how to network with other identity theft victims. Call 619-298-33396, or visit www.privacyrights.org.

The U.S. Secret Service has jurisdiction over financial fraud cases. Although the service generally investigates cases where the dollar loss is substantial, your information may provide evidence of a larger pattern of fraud that required its involvement. Contact your local field office.

Finally, protect your identity by giving it a lower profile. For example, remove your name from junk mail and telemarketing lists by going to the Direct Marketing Association’s website at www.thedma.org/consumers/privacy.html. Call 888-567-8688 to stop receiving pre-approved credit card offers.

Share This

It’s true. Everyone loves a bargain. Likewise, nobody likes to find out they’ve paid too much. It’s true when you’re buying, and it’s true when you’re borrowing. Who doesn’t want the best interest rate possible?
The problem is that if the interest rate on your credit card seems too high, it won’t just lower on its own (unless, of course, you have a variable-rate card and rates in general are dropping). If you’re paying too much in interest, you need to take action now.

Ask and You Shall Receive - Sometimes

The popular advice is to call your credit card company and ask for - or maybe even demand - a lower rate. This can actually work, but only if you have some leverage. Otherwise, asking for a rate reduction is just like asking your boss to give you a raise because you’re a nice person. Businesses don’t willingly part with their money unless there’s some compelling business reason to do so.

The typical American receives so many unsolicited credit card offers in the mail, it should be easy to create some leverage. Just go through your junk mail and find an offer that seems particularly attractive. Then ask your current credit card company to match the offer or risk losing your business. Sounds easy, doesn’t it?

Before you dial the phone, consider your record with your current credit card company. Are your payments frequently late? Is your balance over the limit more often than not? If your track record is less than stellar, your demands for a lower interest rate may be met with some well wishing and a couple of under-the-breath chuckles. Certainly you have nothing to lose by asking - except maybe a little dignity.

A Change Can Do You Good

Some credit card offers are just so good that your current credit card company may not be able to beat the offer, no matter how amazing your record. If that’s the case, you may want to consider moving your balance over to a new card.

There are a couple areas of caution in going this route. First, introductory rates are just that: introductory. Make sure you’re aware of the duration of the introductory period and what the rate will be afterward. Measure that against your current card’s best offer and the difference may not be as significant as you first thought.

Second, if you do obtain that new card, make sure you close the account on the old card. The best intentions can be fouled by the temptation of having two cards at your disposal. The low rate on the new card won’t help much if you run the balance back up on your old card. Being over extended is much worse for your financial picture than too a high a rate on your credit card.

Store Cards Are Not Your Friend

If you have credit cards at your favorite department stores, you should stop worrying about the rate on your VISA or MasterCard and take a look at these. Rates on these are typically in the 18-22 percent range and can even approach the 30-percent mark, no matter how sparkling your credit. And bluntly stated, the issuers of these cards won’t negotiate a lower rate.
The first step in getting this interest under control is to stop using your stores cards. Use your lower-rate major card instead. Don’t trust your will power, either. Cut those cards up now.

Next, if you have any room on one of your major cards, consider getting a cash advance to pay off -or at least pay down - the balances on your store cards. Be careful, though. Cash advances usually carry extra fees. Make sure the interest you save from such a move makes these extra fees worthwhile. And of course, once you have those store-card balances paid off, close the accounts.

In Conclusion

There’s no question that consumer lending is a highly competitive arena. And as you learned in high school consumer education, when competition is high, the consumer wins. Don’t just stand by and watch your money thrown away on rates that are too high. If you think you’re paying more than you should, take charge (pun intended) of the situation and get those rates lowered.

Share This

You may be wondering why credit card companies are so eager to offer up a zero percent interest rate on balance transfers. Isn’t that like giving away free money?

Well, everyone knows that nothing in this world is free. The truth is these credit card companies are making plenty of money off these deals, in large part because of the way finance charges are levied on new purchases (we’ll get to that in a second.)

This article will show you that you can take advantage of the zero percent deal and avoid those hefty finance charges. It requires a second credit card with a low annual percentage rate (APR) or a rewards program. But before we get down to the nitty gritty, you need to fully understand how the zero percent deal works.

Didn’t See it Coming

Basically, credit card companies allow you to transfer a balance from your existing credit card(s) onto their card. For a specified period of time, your interest rate on that balance will be zero percent. Any new purchases are charged at the regular APR. Sounds fair, right?

But what you may not realize is that any new payments made are going to be applied to the principal that has the lowest interest rate - specifically, the amount you initially transferred over to take advantage of the zero percent rate. In other words, you need to pay off that entire balance before your monthly payment can be applied to new charges. Many people are unaware of this, yet it can result in finance charges that build up over time.

Counter Attack

There are two ways to avoid this problem. The first is not to make any charges at all on the card after you’ve made the balance transfer. This may be a tough choice though, because you limit your ability to use plastic in the crunch.

A more realistic approach, but one requiring discipline on your part, would be to use two cards. One would have the zero-percent transfer rate and the other would be a card with an extremely low APR or a rewards program. Here’s how it would work.

1. Find your zero-percent card first. Weed out the zero percent deals that charge a balance transfer fee or an annual fee, and find a card that offers the longest period of time at the zero-percent rate. These range from 6 to 15 months. Keep in mind that some offers will require a number of new purchases each month - if so, shop for ones that require no minimum dollar amounts. The beauty is that if there is no minimum purchase amount required, you can make your mandatory purchases per month for as small an amount as possible, and the finance charge on the new purchases will be miniscule.

2. Try and set up your own repayment plan for the zero-percent balance. If you can’t pay off the entire balance, you can always switch it to another card when the time comes (at the end of the zero-percent period).

3. Find a second credit card so that you’ve got plastic for new purchases. If you think you’ll wind up carrying a balance, find a card with a low APR. If you’re interested in eradicating your debt and can stick to a monthly payment plan, then maybe you should consider a second card that provides a rewards program of some sort - travel, cash, or whatever suits your needs.

In effect, what you’ve done is establish a convenient debt management program for yourself. You’ve taken that big lump of money, moved it to a zero percent deal, and set yourself up on a repayment plan. You’ve also acquired another card so you can go ahead and live your normal life (although we’d suggest sticking to a budget), building up rewards points in the process.

Overall, this can be a sweet deal, but it does depend on your ability to follow a plan. “The problem with zero percent balance transfers is that they are addictive,” says Ravi Shahani, a credit counselor with American Consumer Credit Counselors. “People accumulate debt, than get stuck with high interest.” If you can avoid the temptation, however, and stick to this blueprint, you can knock out your debt without paying a fortune in interest.

Share This