In an ideal situation, credit card processing service ensures that customers get the goods they purchased in good order. In addition, it also assures merchants that they get their money's worth of goods. Each get their end of the bargain in a satisfactory manner.
But in the real world, however, transactions do not go smoothly. Aberrations occur along the way. These problems could originate either from the customers, from the merchants, or from the credit card processing company. And let's face it. Merchants have practically no control on the kind of customers --- whether they be honest or deceitful-- that patronize their business. The credit card processing company can and will take care of fraudulent transactions. Likewise, merchants have no influence or control over the credit card processing system.
This leaves one controllable factor that merchants can manage well: how they conduct everyday business.
Listed below are some credit card processing pitfalls that could put merchants' business in jeopardy:
1.)SKIMMINGThe unscrupulous act of capturing card data and then using the data to manufacture counterfeit credit card is called skimming. Too often, a dishonest salesclerk or a desperately disgruntled waiter would resort to it. They use their own personal digital assistant ( PDA) with a card reader to secretly swipe and obtain credit card data.
2.)STORING UNCRYPTED CARDHOLDERS' DATAIt's very convenient to type credit card information and store these data in your PC without any form of encryption. If you do, you are opening the door wide open to identity theft and forgery. Always take the time to encrypt card information. It's a must. And if you want to back up your credit card data files, do so with the encrypted form.
3.)UNRESTRICTED ACCESS TO COMPUTERJust because they work for you does not necessarily mean you grant any or all employees access to your computers. Any one of them could potentially steal important credit card information. To prevent this, only allow a select few and trusted employees to gain access to your computers.
4.) KEEPING RECORDS ONLY FOR A SHORT TIMEMerchants must keep transaction receipts and records. But sadly, most merchants keep these records for a limited time only-- some one month,others three months,and the longest is six months. This unproductive practice could jeopardize your business. What to do? Well, keep credit card transaction receipts for at least three years. While this may sound a tall order, doing so could save you a lot money and headaches. You could easily produce the necessary supporting documents in case of card disputes even though the transaction occurred two or three years ago. Be sure your accountant keeps all the transaction receipt files within the given period.
5.)IGNORING CARD TRANSACTION SECURITY REQUIREMENTSMajor credit card companies will charge you a fee if you ignore to use built in card transaction security requirement-- Address Verification Service, for instance, or the three digit security code . These charges are called “ pass-through fees”. The amount is added to your discount rate. You could end up paying a large chunk of revenues if you ignore card transaction security requirements.
6.)GIVING LATE ATTENTION TO RETRIEVAL REQUESTSSupposing one customer disputes a credit card transaction. He or she initiates a retrieval request Your credit card processing company then requests that you furnish the necessary receipts for the disputed transaction. Normally, you should do so at the earliest time possible. But if you are busy or have a hectic schedule, you tend to put off this task some other time. Again, this is counter-productive. If you fail to provide your processor the documents within a specified length of time, you will be liable for a costly chargeback. As you well know by now, accumulated chargebacks could put you out of business for good.
Friday, May 1, 2009
Rewards Credit Cards: 5 Things You Must Know
Two good sites to search for credit cards are "CreditCards" and "ConsumerCardReport". ConsumerCardReport specializes in providing insightful guidance to consumers. CreditCards lists the most offers, but none of the extra cards seemed worth recommending.
There are a few fairly simple precautions that consumers should take when using rewards cards:
1. Pay it off each month. The interest rate on rewards cards is usually higher than on other credit cards, so make sure you pay the balance in full every month.
2. Avoid late fees. These can be as high as $39, so make it a habit to pay the credit card bill soon after receiving it -- don't procrastinate.
3. Don't overuse it. Some people are tempted to buy more stuff with their rewards card in order to increase their rebate, which can pile up unnecessary expenses. If you don't think you can control your spending, don't get the card! Some rewards cards will pay you a higher percentage as you spend more money, for example a card may pay 0.5% for the first $5,000 you spend and 1.5% afterwards. This encourages excessive credit card spending, which is why we don't recommend such cards to most people.
4. Make few applications. If you apply for one credit card your credit score will be fine, but as you apply for more cards lenders become more concerned that you may be having money problems. So the more cards you have applied for in the previous six months, the more your credit score will be decreased. After six months, your credit score returns to normal. Our recommendation for most consumers is to make no more than two card applications; but if you plan to get a mortgage or major loan in the next six months, make only one application.
Be aware that the number of credit cards you actually possess won't harm your credit score. More cards may even improve your credit score by increasing your credit-to-debt ratio. In particular, it's wise to maintain your card balances at less than half of your spending limits for those cards.
5. Check the terms. The most reliable description of a card's terms is listed alongside the card application. Although terms can sometimes change, major changes are usually rare.
While the best ways to save money will always involve old fashioned cost-cutting, obtaining a rewards credit card is still a good way to give yourself a virtual raise.
There are a few fairly simple precautions that consumers should take when using rewards cards:
1. Pay it off each month. The interest rate on rewards cards is usually higher than on other credit cards, so make sure you pay the balance in full every month.
2. Avoid late fees. These can be as high as $39, so make it a habit to pay the credit card bill soon after receiving it -- don't procrastinate.
3. Don't overuse it. Some people are tempted to buy more stuff with their rewards card in order to increase their rebate, which can pile up unnecessary expenses. If you don't think you can control your spending, don't get the card! Some rewards cards will pay you a higher percentage as you spend more money, for example a card may pay 0.5% for the first $5,000 you spend and 1.5% afterwards. This encourages excessive credit card spending, which is why we don't recommend such cards to most people.
4. Make few applications. If you apply for one credit card your credit score will be fine, but as you apply for more cards lenders become more concerned that you may be having money problems. So the more cards you have applied for in the previous six months, the more your credit score will be decreased. After six months, your credit score returns to normal. Our recommendation for most consumers is to make no more than two card applications; but if you plan to get a mortgage or major loan in the next six months, make only one application.
Be aware that the number of credit cards you actually possess won't harm your credit score. More cards may even improve your credit score by increasing your credit-to-debt ratio. In particular, it's wise to maintain your card balances at less than half of your spending limits for those cards.
5. Check the terms. The most reliable description of a card's terms is listed alongside the card application. Although terms can sometimes change, major changes are usually rare.
While the best ways to save money will always involve old fashioned cost-cutting, obtaining a rewards credit card is still a good way to give yourself a virtual raise.
Bad Credit Information Source
Today, with Americans carrying more debt than ever before, bad credit is often a way of life for millions of Americans. A bad credit personal loan is a flexible loan and allows you to use it for any of your personal needs.
Getting an unsecured bad credit loan if you are unemployed is harder to achieve. They have a notion that people with bad credit history have undesirably axed their source of funding, which comes from lending. Bad credit tenants also can avail loans, bad credit tenant loans are specially customized for them.
A really useful thing to know is that a bad credit personal loan can be used for just about everything including:
o Buying Christmas presentso Furnishing a rented homeo Paying off credit card billso A new car
Most companies that offer bad credit personal loans are not interested in what the money will be used for, they are merely interested in whether the person taking out the loan will be able to make the repayments or not. If you're interested to learn about the things you can do to fix bad credit - yours in particular - read on. But making some down payment will favour you in availing bad credit auto loans at an affordable interest rate.
With increasing competition among the lenders, getting an unsecured bad credit loan is no longer an unachievable dream. Usually a bad credit scorer has to pay high rates of interest but a bad credit scorer can also avail auto loan on competitive and low interest rate which is only possible through a co-signer. A credit score below 500 is considered a bad credit score in the eyes of a lender.
Bad credit personal loans help to improve credit scores by timely repayment of the loan amount. You can also use your home's equity to avail a low cost bad credit loans. Bad credit personal loans are offered to bad credit holders having any of the following in their credit history:
-Arrears-Defaults-Bankruptcy-County Court Judgment-Late payments-Poor credit score
Bad credit personal loans are offered to different bad credit holders with different amounts. In such situations, bad credit student loans may come in handy. When the borrower approaches for a new loan, he need not be penalised for a bad credit history.
A bad credit auto loan not only helps you to get new or used vehicles but it can also help you rebuild your credit history.
Getting an unsecured bad credit loan if you are unemployed is harder to achieve. They have a notion that people with bad credit history have undesirably axed their source of funding, which comes from lending. Bad credit tenants also can avail loans, bad credit tenant loans are specially customized for them.
A really useful thing to know is that a bad credit personal loan can be used for just about everything including:
o Buying Christmas presentso Furnishing a rented homeo Paying off credit card billso A new car
Most companies that offer bad credit personal loans are not interested in what the money will be used for, they are merely interested in whether the person taking out the loan will be able to make the repayments or not. If you're interested to learn about the things you can do to fix bad credit - yours in particular - read on. But making some down payment will favour you in availing bad credit auto loans at an affordable interest rate.
With increasing competition among the lenders, getting an unsecured bad credit loan is no longer an unachievable dream. Usually a bad credit scorer has to pay high rates of interest but a bad credit scorer can also avail auto loan on competitive and low interest rate which is only possible through a co-signer. A credit score below 500 is considered a bad credit score in the eyes of a lender.
Bad credit personal loans help to improve credit scores by timely repayment of the loan amount. You can also use your home's equity to avail a low cost bad credit loans. Bad credit personal loans are offered to bad credit holders having any of the following in their credit history:
-Arrears-Defaults-Bankruptcy-County Court Judgment-Late payments-Poor credit score
Bad credit personal loans are offered to different bad credit holders with different amounts. In such situations, bad credit student loans may come in handy. When the borrower approaches for a new loan, he need not be penalised for a bad credit history.
A bad credit auto loan not only helps you to get new or used vehicles but it can also help you rebuild your credit history.
Women Are Financially Ignorant No More
In past centuries, financial affairs was a subject that women were not familiar with. The predominantly patriarchal nature of the world had ensured that the woman remained in the kitchen. However, things had been changing for a long while, and the birth of feminism in the twentieth century transformed the existing equations. Women began to leave the comforts of the home and go to work. It was not about being forced to go to work. Women now had the option. And today's women are reaping the benefits of the feminist struggles of yesteryear. The women of today refuse to be relegated to their home. They take their dreams and ambitions seriously and are making great advances in the world of today. Hence, they are also hoping to find sound investment opportunities, and one of the most popular investment options is the house.
Real estate provides a lucrative investment opportunity. It is great value for money. Real estate prices seem to be set to keep rise for a long while. Perhaps there is a peak somewhere. But if current trends continue, that peak shall hopefully still be some distance away. That is great news for all potential investors. However, making sense of all the jargon that floats around the loan and mortgage is likely to be fairly tough. It can be a problem for someone who is new to the world of mortgage loans. Thus, it makes sense to contact a mortgage broker who can explain some of the jargon and help you come across the best deals.
The Internet is filled with sites that promise to put potential home buyers in touch with suitable lenders. If you are a woman, you should try to find a site that is specifically for women. Brokers that specialize in women-specific deals are more likely to help you find cheap mortgages that would prove to be your best bet. There might be a number of lenders who provide special discounts to women. Empowerment is still high on the agenda of many organizations. Thus, you should try to look for women-specific deals. You should save up on costs in the bargain.
As for those women who have been down this road before, it helps to look around before making a decision. The markets are inundated by some great mortgage deals. However, there are likely to be some worthless mortgages as well. Go through the fine print and objectively evaluate each deal. This will be a long term involvement, so take your time and make sure you make the right choice.
Real estate provides a lucrative investment opportunity. It is great value for money. Real estate prices seem to be set to keep rise for a long while. Perhaps there is a peak somewhere. But if current trends continue, that peak shall hopefully still be some distance away. That is great news for all potential investors. However, making sense of all the jargon that floats around the loan and mortgage is likely to be fairly tough. It can be a problem for someone who is new to the world of mortgage loans. Thus, it makes sense to contact a mortgage broker who can explain some of the jargon and help you come across the best deals.
The Internet is filled with sites that promise to put potential home buyers in touch with suitable lenders. If you are a woman, you should try to find a site that is specifically for women. Brokers that specialize in women-specific deals are more likely to help you find cheap mortgages that would prove to be your best bet. There might be a number of lenders who provide special discounts to women. Empowerment is still high on the agenda of many organizations. Thus, you should try to look for women-specific deals. You should save up on costs in the bargain.
As for those women who have been down this road before, it helps to look around before making a decision. The markets are inundated by some great mortgage deals. However, there are likely to be some worthless mortgages as well. Go through the fine print and objectively evaluate each deal. This will be a long term involvement, so take your time and make sure you make the right choice.
Credit Card Debt Reduction for the Elderly
As we age, various problems begin to raise their heads. The years that follow retirement are not an easy time. Many of these adjustments have to take place at the psychological level. For instance, the senior citizen has to get used to his new-found status as he is no longer going to be an earning member of the family. In effect, this would mean giving up the sense of independence that he had held so dear for so long. Entering the hallowed group of senior citizens generally entails that the new entrant begins to be dependent on the younger members of his family. This can give one's self-respect a beating, but is relatively unavoidable.
A lot of senior citizens find themselves running up high credit card debt to take care of costs that pertain to old age. This could include the bills for doctor's visits, medications, and other related things. Senior citizens who have to pay the heavy installments a loan that they had secured earlier may even resort to a cash advance to help them pay off that loan. The credit card does lend a helping hand to the senior citizen who is trying to pay off his bills. At the same time, running up a high credit card debt should be avoided as far as possible. Yet, many people who have passed retirement age have no other choice. Their pensions and depleted savings would not be sufficient when it comes to paying off a number of bills.
However, senior citizens can negotiate with their credit card providers for reduced debt. Many card providers take into consideration the age of the card holder and are willing to make concessions on repayment. The credit card companies recognize the fact that several senior citizens are unable to bear the burden of heavy credit card debt. Negotiating with senior citizens makes good business sense for the credit card company while also building goodwill for them with the post-retirement age group.
Senior citizens would also do well to look for cards that are more affordable. Switching credit cards may be a good idea for senior citizens who have a very high interest. Moreover, with the zero percent balance transfer credit cards available in the market, even the act of switching need not be too costly. There are great bargains to be found if one does a lot of asking around. Growing old may not be the easiest thing in the world. But senior citizens can reduce their worries considerably.
A lot of senior citizens find themselves running up high credit card debt to take care of costs that pertain to old age. This could include the bills for doctor's visits, medications, and other related things. Senior citizens who have to pay the heavy installments a loan that they had secured earlier may even resort to a cash advance to help them pay off that loan. The credit card does lend a helping hand to the senior citizen who is trying to pay off his bills. At the same time, running up a high credit card debt should be avoided as far as possible. Yet, many people who have passed retirement age have no other choice. Their pensions and depleted savings would not be sufficient when it comes to paying off a number of bills.
However, senior citizens can negotiate with their credit card providers for reduced debt. Many card providers take into consideration the age of the card holder and are willing to make concessions on repayment. The credit card companies recognize the fact that several senior citizens are unable to bear the burden of heavy credit card debt. Negotiating with senior citizens makes good business sense for the credit card company while also building goodwill for them with the post-retirement age group.
Senior citizens would also do well to look for cards that are more affordable. Switching credit cards may be a good idea for senior citizens who have a very high interest. Moreover, with the zero percent balance transfer credit cards available in the market, even the act of switching need not be too costly. There are great bargains to be found if one does a lot of asking around. Growing old may not be the easiest thing in the world. But senior citizens can reduce their worries considerably.
Credit Counseling Info Source
Unlike bankruptcy or debt settlement, you'll still be liable for paying the entire balance owed over a number of years, but as stated, if you can realistically commit to a long term payment arrangement, and you don't mind waiting a few extra years to become debt-free, consumer credit counseling may be right for you. As a result, many people are unsure if credit counseling can actually help them get out of debt. Typically, credit counseling involves working with the counselors to work out a financial strategy to manage the debts.
Credit counseling was created with the consumer in mind, some companies failed to recognize that. It helps to keep in mind that appropriate Federal and Senate committees have taken cognizance of the profitable nature of some of the non-profit credit counseling agencies. The biggest learning factor provided by a reputable consumer credit counseling agency will be knowledge they present you with in order to bring a more disciplined financial environment into your life resulting in less stress in terms of your current financial shape.
However, consumer credit counseling is not a free service and this, unfortunately, is a barrier in itself for those individuals too far in debt to afford the service. And, in case you find that you are not having a sound credit record, then, don't waste time to go for credit counseling because it helps immensely. Of course, counseling at the Consumer Credit Counseling Service is confidential and at no cost.
Contact Consumer Credit Counseling, As mentioned earlier, Consumer Credit Counseling is a non-profit group funded by creditors to help consumers negotiate repayment plans. Solid, reputable credit counseling agencies are an invaluable resource for debtors who have reached the end of their financial rope. Finally, it is important that you curb spending urges, since the benefits gained from the credit counseling will be lost if you have not learned to better manage your finances and avoid the situation that lead you to credit counseling in the first place.
It isn't going to do you any good to get out of debt if the credit counseling doesn't teach you how to manage your money so that you don't come knocking on debt's door again. Some families have found credit counseling to be one of the best solutions for avoiding bankruptcy. Credit Counseling Offers Third Party Advice, another option for debt consolidation is to get third party advice as to which program is best for your situation.
If you do find yourself in a predicament like this and you need professional help then you should really think of seeing a credit counselor or credit counseling service. You may want to check your particular states finance and banking department if you have questions regarding the status of the credit counseling organization you are speaking with. It is advisable to consult agencies that are accredited to either the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.
If you'd like access to more information and resource links pertaining credit counseling, then check out my site at: Free Credit Counseling
Credit counseling was created with the consumer in mind, some companies failed to recognize that. It helps to keep in mind that appropriate Federal and Senate committees have taken cognizance of the profitable nature of some of the non-profit credit counseling agencies. The biggest learning factor provided by a reputable consumer credit counseling agency will be knowledge they present you with in order to bring a more disciplined financial environment into your life resulting in less stress in terms of your current financial shape.
However, consumer credit counseling is not a free service and this, unfortunately, is a barrier in itself for those individuals too far in debt to afford the service. And, in case you find that you are not having a sound credit record, then, don't waste time to go for credit counseling because it helps immensely. Of course, counseling at the Consumer Credit Counseling Service is confidential and at no cost.
Contact Consumer Credit Counseling, As mentioned earlier, Consumer Credit Counseling is a non-profit group funded by creditors to help consumers negotiate repayment plans. Solid, reputable credit counseling agencies are an invaluable resource for debtors who have reached the end of their financial rope. Finally, it is important that you curb spending urges, since the benefits gained from the credit counseling will be lost if you have not learned to better manage your finances and avoid the situation that lead you to credit counseling in the first place.
It isn't going to do you any good to get out of debt if the credit counseling doesn't teach you how to manage your money so that you don't come knocking on debt's door again. Some families have found credit counseling to be one of the best solutions for avoiding bankruptcy. Credit Counseling Offers Third Party Advice, another option for debt consolidation is to get third party advice as to which program is best for your situation.
If you do find yourself in a predicament like this and you need professional help then you should really think of seeing a credit counselor or credit counseling service. You may want to check your particular states finance and banking department if you have questions regarding the status of the credit counseling organization you are speaking with. It is advisable to consult agencies that are accredited to either the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.
If you'd like access to more information and resource links pertaining credit counseling, then check out my site at: Free Credit Counseling
Debt To Income Ratio
Debt to income is a ratio of your total monthly debt payments to your total monthly income expressed as a ratio or percentage. It is a rather simple calculation but it can be deceiving unless you include all debt and all income in the calculation.
The calculation of your debt to income ratio is a straightforward one. You simply divide your total monthly debt payments by your total net income (that is your income after taxes). While some debt is unavoidable and may even be desirable for achieving your financial goals the real question is how much debt is too much; just where do you draw the line. Obtaining credit is often a function of a loan officer calculating the debt to income ration as a way of determining your ability to meet new obligations. Too high a debt to income ration will also have a negative impact on your FICO score, often making credit obtained more expensive than it needs to be. Below I suggest categories for inclusion in calculating your debt to income ratio to see where you stand.
Monthly Debt Payments to Consider:
Mortgage or rent paymentsPayments on a home equity loanCar paymentsStudent loan paymentsMinimum credit card payments times 2Other outstanding loan amount paymentsChild support payments
Monthly Income to Consider:
Total net or take-home payChild support or alimony payments received1099 Income after taxes divided by 12Other monthly income
Now add up debt and income and divide.
The above list is only a guideline for gathering personal information. It may include every possible aspect of your debt/income but you may need to add categories or not use some of the categories in your calculation. If you add lines to your debt calculation do not include bills for services or products unless you have placed such bills under a payment plan such as establishing a fixed payment plan with your dentist. Under income do not include windfalls such as one time gifts, an insurance settlement, an inheritance or lottery winnings.
So now you have made the calculation. How can we answer the question how much is too much? When applying for credit, the loan officer will look at your debt to income ratio as one factor in making a decision but it will not be the only factor considered. The same debt to income ratio may be great for one family but may have a negative impact on another. Debt to interest ratios in the end are a subjective tool for loan officers to make decisions about your ability to meet a new obligation. There are some general guidelines, however, that will give you a reasonably solid picture of where you stand in the eyes of a loan officer.
30% or less is generally considered as an excellent ratio by the vast majority of loan officers20% - 36% is a good ratio and will most likely not cause any problems with loan officers or have a negative impact on your FICO score36% - 40% puts you on the edge of the limits of acceptability. Most lenders will ask for an explanation for why your debt to income ratio is so high. In addition, a debt to income ratio in this range begins to have a negative impact on your FICO score so lenders look to other strong numbers before making a decision to loan more money to you40% or higher sends up red flags with lenders and your FICO score. Often, this high a ratio will be a deal killer with most lenders
By calculating your own debt to income ratio you begin to get a handle on your own financial situation. If the ratio is too high it tells you you are too deep in debt and you must do something to reduce debt. Of course, if it is very low then you need do nothing. For most lenders and the impact of debt to income on your FICO score a positive reduction in the ratio is presumed to be a sign of a healthy financial condition and goes a long way in enhancing your credit history.
The calculation of your debt to income ratio is a straightforward one. You simply divide your total monthly debt payments by your total net income (that is your income after taxes). While some debt is unavoidable and may even be desirable for achieving your financial goals the real question is how much debt is too much; just where do you draw the line. Obtaining credit is often a function of a loan officer calculating the debt to income ration as a way of determining your ability to meet new obligations. Too high a debt to income ration will also have a negative impact on your FICO score, often making credit obtained more expensive than it needs to be. Below I suggest categories for inclusion in calculating your debt to income ratio to see where you stand.
Monthly Debt Payments to Consider:
Mortgage or rent paymentsPayments on a home equity loanCar paymentsStudent loan paymentsMinimum credit card payments times 2Other outstanding loan amount paymentsChild support payments
Monthly Income to Consider:
Total net or take-home payChild support or alimony payments received1099 Income after taxes divided by 12Other monthly income
Now add up debt and income and divide.
The above list is only a guideline for gathering personal information. It may include every possible aspect of your debt/income but you may need to add categories or not use some of the categories in your calculation. If you add lines to your debt calculation do not include bills for services or products unless you have placed such bills under a payment plan such as establishing a fixed payment plan with your dentist. Under income do not include windfalls such as one time gifts, an insurance settlement, an inheritance or lottery winnings.
So now you have made the calculation. How can we answer the question how much is too much? When applying for credit, the loan officer will look at your debt to income ratio as one factor in making a decision but it will not be the only factor considered. The same debt to income ratio may be great for one family but may have a negative impact on another. Debt to interest ratios in the end are a subjective tool for loan officers to make decisions about your ability to meet a new obligation. There are some general guidelines, however, that will give you a reasonably solid picture of where you stand in the eyes of a loan officer.
30% or less is generally considered as an excellent ratio by the vast majority of loan officers20% - 36% is a good ratio and will most likely not cause any problems with loan officers or have a negative impact on your FICO score36% - 40% puts you on the edge of the limits of acceptability. Most lenders will ask for an explanation for why your debt to income ratio is so high. In addition, a debt to income ratio in this range begins to have a negative impact on your FICO score so lenders look to other strong numbers before making a decision to loan more money to you40% or higher sends up red flags with lenders and your FICO score. Often, this high a ratio will be a deal killer with most lenders
By calculating your own debt to income ratio you begin to get a handle on your own financial situation. If the ratio is too high it tells you you are too deep in debt and you must do something to reduce debt. Of course, if it is very low then you need do nothing. For most lenders and the impact of debt to income on your FICO score a positive reduction in the ratio is presumed to be a sign of a healthy financial condition and goes a long way in enhancing your credit history.
Subscribe to:
Posts (Atom)
