Archive for May, 2009

Banks evolved from the concept of a royal treasure room to a strong room where hired guards watched over valuables. Keeping assets safe was the principal cause.

The next major change in banking was the concept of charging interest for a loan. For the longest period of time, laws against Usury kept this from happening in Christian countries - an interpretation of the Bible forbade charging interest on loans. Later, this expanded to paying people interest to hold deposits within the bank.

There is no bank in the world that does not issue loans; it’s their primary reason for existence. Modern banks offer a wide array of loan products for every consumer (and business) need.

All of which comes at a nice interest though! Speaking for myself, my first relationship with a bank was when I opened my first savings account. But it has been the bank loans that have made me dependent on the bank for my survival.

Most people’s first experience with taking out a bank loan is for a car. Their second is for paying for a home, or as a student loan.

You see, it’s unlikely that anyone has money sitting around to buy a house for cash on the transaction. Most people lack the discipline to save money every month for a house when paying rent; this opens up the next kind of bank loan - the mortgage loan.

I myself could never have hoped to buy a condo without a bank loan. (Of course, it is another matter altogether that I will continue to pay this bank loan, with interest, for another fifteen years to come!) Even a mortgage is just another variety of a bank loan issued for housing purposes, with collateral attached.

There are also other types of bank loans issued for various purposes. A personal bank loan will enable you to buy a broad spectrum of goods or services. This sort of bank loan will come in handy for repairs, renovations, marriages, celebrations, events or any other expenses that you don’t have cash lying around for.

And then of course, there are student bank loans. There are bank loans that will help you buy a car. And again, there are bank loans that will help you buy computers, washing machines and other consumer goods.

The most common kind of bank loan is one you carry in your wallet. It’s your credit card. Yes, even a credit card is a bank loan. Many banks even offer consolidation loans to pay off your credit card debt.

Most loans issued worldwide to consumers are housing and mortgage loans. They’re a tiny fraction of the business debt market, where the entirety of the financial industry runs off of leveraging assets by taking out loans.

Whether it is a small business operated out of the home or a large business that needs millions of dollars in order to tide over a cash flow problem or to acquire assets, banks loans issued to businesses far outstrip individual bank loans.

One could go so far as to say that without bank loans, the vast majority of business worldwide would collapse. Small wonder then that banking, and by association investment, lending, finance and credit are the words that drive business in the modern day.

Learning how to pay off credit card debt is one of the best things an individual can do for themselves and for their family. Once debt is paid down, your quality of life will increase as you won’t have to worry about the bills, calls, and poor credit score. The following are some of the best ways to accomplish this goal. Learn how to payoff credit card debt.

How to Pay Off Credit Card Debt: 5 Tips

1: Develop a plan that allows you to pay off your debt. For example, you should pay down the debt with the highest interest rate first, paying as much as possible off on that card before moving on to the next (when the initial card is paid off). Keep up on all cards by paying the minimum except for the highest interest rate, which you will pay the most on.

2: Balance transfers can be a big help. If you get a credit card offer with a 0% introductory period for balance transfers, look at your budget and figure out how much you could spend on that each month in a realistic context. Transfer enough from your highest interest rate card to the balance transfer card to exactly match that payment schedule, and run that debt down.

3: Your home equity can bail you out of the hole, but not without some risk. If you’ve got a mortgage and equity in your home, you can sometimes get your bank to write you a second mortgage, converting your credit card debt into it. This lets you pay off a lot of debt fast. The risks are that you’re giving up your equity in your most valuable tangible asset, and if you don’t stop your spending, you’ll find yourself in the same situation you were in before. Change you spending habits before doing this.

4: Discipline is important. Build a budget, and make it a livable budge. Budget your luxuries in first. Spend the time to go through three months of receipts to see how much you’re actually spending out of pocket on things like gasoline, groceries and fast food. Track it for a month after you’ve built your three month average. Notice how much you’re spending on things that can be cut back? Just learning to eat in and pack a lunch to work can save you a hundred dollars a month. (Don’t believe me? Figure that a typical fast food meal costs 7 dollars. If you eat one of these four days a week, that’s 28 dollars a week, and over a hundred dollars a month. Throw in eating out for dinner because you’re too lazy to cook and it goes even higher.) Build your budget with some slack in it, and with some fun expenses in it too. Just because you’re working off a debt doesn’t mean you aren’t allowed to have fun too.

5: Evaluate your options. One of the important ones is consumer credit counseling. Some times, you might be dug in so deep that there’s no easy way out. Learning to pay off credit card debt might take more than you can handle at the moment. Consumer credit counseling can help. They can teach you how to better manage your spending and budget, they can intervene and get you balances and interest rates adjusted, or spread out your payment timescales, or even get a consolidation loan to reduce your monthly payments to a sustainable level.

Think of your change in spending habits as something you’ll continue after paying down your debt. Once it’s eliminated, take the money you were putting into paying down cards and put some of it into CDs or mutual funds. It’s far better to earn interest than to pay it.

If you’re paying any attention at all to the financial news nowadays, you know that credit card companies are starting to come under the microscope. For years they’ve had their way with their customers. They’ve been able to set and charge fees with virtually no oversight - and many of these fees have been difficult to understand if not outright hidden.

The financial climate is changing though. Consumers are waking up to the reality that they have little or no control over what credit card companies do and that they (the consumers) have to find alternatives that are more customer-friendly. One of those more customer-friendly alternatives is the prepaid debit card. A prepaid debit card can actually help you get free of your credit card fees.

If you’re in a position to do so, I propose you start converting all of your existing credit card spending over to prepaid debit cards. Month-by-month, phase out all of the credit card purchases until you make no more. Then (again, if you can), set up an automatic payment to your credit card, something that is higher than the minimum payment required and something that is scheduled to arrive at least a few days in advance of the billing due date. Then lock the credit card away in a drawer!

This will probably save you a lot in fees over time - especially penalty fees which are the credit card company’s bread and butter. You see it’s in their best interest to charge you as many fees as they can and so they change the playing field in their favor whenever it benefits them and maneuver the rules so they’re difficult for consumers to understand or even follow. For instance, have you ever had an over-limit fee?

An over-limit fee is the penalty fee you’re charged whenever you run up your balance over your credit limit. Since you can do this pretty easily, your “limit” obviously isn’t really a hard and fast number. Rather, it’s more of a threshold that triggers extra fees from the company. Then, if you just pay the minimum payment (which the company so conveniently calculates for you) you’ll drop below the limit right? Well, not quite. You see, often the next finance charge will send your balance right back over the limit and guess what? You got it, you get charged another over-limit fee. It’s pretty sneaky if you ask me. If you used a prepaid debit card, that scenario would never happen.

Prepaid cards don’t come with tricky monthly finance/billing cycle calculations either. These are the computations the credit card companies make to determine how much they’re going to charge you to carry your balance from one month to the next. There are actually 6 or 7 different ways these charges can be calculated and everyone is designed to yield the highest return for the company based on your spending habits.

There are also hidden interchange fees that all credit card customers pay. These are fees that are paid by the retailers for the actual transactions costs of doing business with a particular credit card company. They’re negotiated in secret and aren’t really published anywhere. But you can be sure that consumers are paying them in the form of higher prices so the retailers can cover their costs. And these represent a huge profit for the credit card companies because these fees will be paid even if you can’t pay your monthly bill.

Credit card companies hold all the power. They control the rates, they control the rules, and they set the fees. Just about the only thing you have control over is whether or not you do business with them. But if you have a high balance, you’re probably stuck. Well I want to challenge you to get “un-stuck.” Make the switch over to prepaid debit cards and use them to more properly manage your budget. You’ll be glad you did - and you’ll save money too.

If you’re looking at making home renovations or considering a large-scale home improvement project, you know how costly it can be. The costs for construction supplies, hiring a qualified work force and paying the various fees for permits can quickly add up.

Most people think of banks as the only place to get a house remodeling loan, but hardware store credit cards are essentially loaning you money to upgrade your dwelling. Credit cards from home improvement stores have some extra advantages.

No Interest for a Limited Time: Many of those hardware store credit cards give you a period of 6 to 12 months with zero interest charges as long as you use the credit card in their store. Those savings could add up to big money if you are able to pay back all of the amount you borrowed on the credit card. Even more importantly, big stores like Lowe’s Home Centers may have several different credit cards available for your unique personal situation.

In-Store Discounts: When you initially use hardware store credit cards you will often get a small discount as well. You might save 3% - 15% on the total cost of the project, which could be a pretty good chunk of change at the end of the day.

Convenience of Shopping For Everything At Once: These large home improvement stores now offer just about everything you could need to upgrade your home and most offer lots of contractor services to actually do the work for you. Instead of visiting a dozen stores to find a kitchen sink you can go to one store and buy a faucet, a sink, a refrigerator, all the other appliances and even hire and schedule the installers all at one time. With one store credit card you can purchase the supplies you need as well as hire someone to do all the work for you!

Banks loan you money in hopes that they’ll make profit with the interest and fees you pay back. Big home improvement stores don’t have to make money on interest because they’ll be making their profit on the products and services you buy. Because of that they can usually offer lower interest rates and even better pricing. When you use a home improvement store credit card you’re locked into using a specific store, but if that store has everything you need then it’s definitely worth considering!

Technology has allowed businesses to be more and more efficient. And if you’re going to stand out these days you need to make sure you’re making use of the latest tools.

Of course the type of technology you’re going to use needs to be right for your business. And if your business is mobile in nature you should really consider using wireless credit card processing. This type of technology is a great fit for companies that go to trade shows, delivery businesses, locksmiths, and many more.

Being able to process credit cards with a wireless device can really free you up to accept credit cards no matter where you are. Just think of the flexibility this will give your business!

Is this technology right for every business? Well, obviously no. If your business has a very fixed location, you probably won’t have much of a need for this kind of technology.

But if your business is mobile in nature, this type of wireless technology really could make you more efficient. There are plenty of uses for this type of technology; you just have to be creative.

These devices have a lot of great features as well. Most of them have a printer, keypad, and rechargeable battery pack. Basically everything you need to process cards on the go.

Any business has to have the right tools. And if your business is mobile in nature, you need to have the right tools to charge your customers for your products or services. Doing wireless credit card processing could be a great way for you to stand out from the competition!

Mobile businesses nowdays have plenty of options for mobile EFTPOS transactions. The speed of billing and receiving payment is critical to success.

A technician can, for example, make a service call, invoice the customer and receive immediate payment rather than manually imprinting the customers credit card, which requires the business to get the paperwork to the bank or to enter it electronically at a later time, and which carries no guarantee that the charge will be authorised.

Not only are the charges higher but there is also a potential risk element to the transaction. With mobile EFTPOS, the processing can be done immediately. Importantly an EFTPOS solution supports debit cards, which cant be processed manually and manual terminals pose a security risk .

Alot of alternative phone options are not able to process Debit Card transactions either. This is usually around 40% - 50% of the total Eftpos transactions, and usually a much cheaper transaction option.

The differences between mobile devices themselves is whether the terminal does the communicating or if a mobile phone or PDA is used instead. The terminal is a far better option in the long run and allows the business to accept both credit and debit cards.

Alot of alternative phone options are not able to process Debit Card transactions either. This is usually around 40% - 50% of the total Eftpos transactions, and usually a much cheaper transaction option.

The process of handling a transaction using a mobile terminal is similar to a standalone EFTPOS transaction and far more secure for all parties concerned.

If you’re just getting started in a new home business, online, or small business you’re going to need a merchant account in order to accept credit cards. But do you know what to look for when it comes to fees? Let’s take a look at some of the different fees you’ll see so you know what to watch for.

Setup Fees: This is the first fee you’ll run into when dealing with a merchant account company. I’ve seen these fees range anywhere from $50-$700, so you really need to pay attention to how much a company is going to charge you.

Per Transaction Fees: Every merchant account charges some sort of per transaction fee. They usually break these fees up into two different ones. One is a flat rate such as $0.30, and the other will be a percentage such as 2.5%. As you process more and more with a merchant company the rate will usually go down. Or at least you can renegotiate it.

Monthly Fees: This is another common thing that you’ll see, and like the other fees this one tends to range all over the place. I’ve seen some companies charge as much as $40, and I’ve seen some charge only $10 a month. Some companies don’t charge monthly but instead charge yearly, so that’s another thing to watch for.

Processing Limits: Another problem you run into from time to time is a low processing limit. If you have a limit on your account and need to process more in a given month you’ll usually have to renegotiate with the merchant company. Look for companies that either just grow with you or have a realistic limit that you can work with.

There are usually other fees that you’ll run into from time to time, but if you use these fees as a baseline to do your comparisons you should be able to find a really good deal on your next merchant account.

There are many Credit Card Processing Businesses that you may consider getting a merchant account from, but you should know the basics. Here are some tips to help you get one and what to look for.

How do I get one? Well, there are many ways to go about getting a merchant account from a Credit Card Processing Business. You just have to know where to look.

If you have decided you are ready for your merchant account, then it is likely to start finding a Credit Card Processing Business over the internet. This is a great choice for an online business and you may even be able do the whole process online. You may as well use your bank or find Credit Card Processing Business that specializes in seller’s account. With any of these, you must ensure that the options you research are right for your business.

Once you have figured out which way you want to go, you will need to learn more about the application process. This may include find out about banking, personal and business information that the Credit Card Processing Business will request from you.

Then you will put all the information into an application. In a few pages you will summarize all necessary data about you and your company. The Credit Card Processing Company may need you to fax the forms in order to get the credit card. If you go to any of their offices, you may have an answer after right away on whether you are approved or not.

What to search?

You may need to put the costs together. Some may be free or even go over the $400 if you are not careful. You may actually find this out only before signing any documentation. You just have to ask yourself how much you are willing to pay the Credit Card Processing Business when preparing to set up your account. Also make sure you pay attention to the percentage rates. These are often 2% or less. Of course, the lower the better for you, but if the processing company charges more percentage fees, then you will probably have a lower monthly fee. It really depends on the Credit Card Processing Business and what their policies are. This is something that may apply before beginning his contract with them. Be sure you understand what you are doing and the conditions that you will follow.

Another thing you should watch for are company frauds. Sometimes a person pretends to be an established company and has even title fees. Then, they will disappear and not answer any of your phone calls. Most of the time, you can find Credit Card Processing Businesses that are real but if you are using the Internet, be extremely careful. You can avoid this problem by investigating the company you are considering doing business with. You always want to keep your business and personal accounts safe.

One of the most important skills that a person must learn is how to pay off credit card debts. It helps people build a better future for themselves and their family, and once debt is paid down, quality of life increases dramatically. You can stop worrying about bills, you can stop worrying about your awful credit score, and you can make your life better all the way around. Here are some excellent tips for getting out of debt.

How to Pay Off Credit Card Debt: 5 Tips

1: Plan your way out of this. Tally up all your credit card bills, and sort them from highest interest rate to lowest. Pay the minimum on all of them, and devote any extra cash in your budget to paying off the highest interest rate card first. Once that one’s paid off, reward yourself ” take $25 a month out of the budget that had been going to paying off the highest interest rate card and start paying down the second highest rate one. Use that $25 for something fun and something special as your reward for being good.

2: Consider balance transfers. Learning how to pay off credit card debt also means learning how to pay off the least amount. For example, you may be able to secure a zero interest credit card allowing you to transfer your high interest debt to it without cost. Pay off that balance within the introductory offer and you will have saved substantial money not paying any interest.

3: Consider borrowing against your home. This tip for how to pay off credit card debt is one you should think closely about. If you have equity in your home, you could take out a loan from the home and use the proceeds to pay down your credit cards. If you do this, you must commit to not having this amount of debt again since it could allow you to end up with twice as much debt and therefore twice as much trouble. On the other hand, if you can control your spending, you could pay off credit card debt quickly and very affordably in this manner.

4: Spending habits are important. If you don’t make a monthly budget, do so. Do it for three months, and tally up every penny you spend. You’ll see how much you’re spending on credit cards, and on things that are invisible leaches on your funds, like getting your morning latte. Four dollar cups of coffee add up to significant money over a typical work month. Your budget should have fun items in it; otherwise, you’ll splurge on something you shouldn’t do and undo most of the good you’ve done. Good spending habits will whittle down debt quickly.

5: Consider consumer credit counseling. Sometimes, learning how to payoff credit card debt is not something that can be done easily. It is troubling and overwhelming. Therefore, reaching out to a service provider may be the best route to take. You can learn to better control your spending and budget, get your balances and interest rates lowered, and pay off your debt in months, in some cases.

A critical skill many people have to learn is how to pay off unsecured credit card debt. It’s a commitment to making a better life for yourself, and for your children. Once you’ve made the commitment, you’ll be surprised at how quickly the benefits come to you, and eventually you’ll live your life free of debt.

If you’re just starting a new business you probably already know that you’ll need to get a merchant account. But do you know what to look for when you are comparing different companies? In this article we’ll take a look at a few different merchant account fees you’ll see so you can make a fair comparison.

Setup Fees: This is the first fee you’ll run into when dealing with a merchant account company. I’ve seen these fees range anywhere from $50-$700, so you really need to pay attention to how much a company is going to charge you.

Transaction Fees: This one is a given - all merchant account companies will charge a little bit for every transaction you process through your account. This is usually broken up into two parts. The first part is a flat rate, usually anywhere from $0.20 to $0.40. The second is a percentage, which can range anywhere from 1.55% to 5.0%. This rate is usually negotiable depending on how much you process each month.

Statement and Other Monthly Fees: There are several monthly merchant account fees that you’ll run into. Some of the standard ones are statement and gateway fees. These fees range all over the place. Some companies have decided to make this a yearly fee rather than a monthly fee.

Processing Limits: Another problem you run into from time to time is a low processing limit. If you have a limit on your account and need to process more in a given month you’ll usually have to renegotiate with the merchant company. Look for companies that either just grow with you or have a realistic limit that you can work with.

There are usually other fees that you’ll run into from time to time, but if you use these fees as a baseline to do your comparisons you should be able to find a really good deal on your next merchant account.