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Is business credit card helpful? |
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Written by Abdul-Qadir Thamin Ayinde
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Saturday, 20 June 2009 03:45 |
Business credit card
‘Yes’ –is the answer that’s comes out almost immediately. That is true at least for most businesses (especially small businesses). Before we delve deeper into how business credit cards are helpful, let’s try and understand what a business credit card is.
Put simply, a business credit card is a credit card that is owned by a business and not an individual. To understand this better, you can simply draw an analogy between the business credit cards and business bank accounts, which are in the name of the business as well. Other than that, business credit cards work in pretty much the same fashion as the personal credit cards; with a few exceptions. These exceptions are in the form of flexibility in credit limit, low APRs and some other additional benefits that are available to business credit cards only.
Even from just that, business credit cards seem a good proposition. However, business credit cards would be attractive even without those benefits because the main benefit lies elsewhere. The big-big benefit from a business credit card is realised in terms of business expense accounting. For most small businesses, business expense accounting is a big overhead. With business credit cards, this is handled very easily – you just have to ensure that you make all your business expenses on your business credit card and let the personal expenses be on the personal credit card i.e. segregation of business and personal expenses is all you need to do. So the bill for your business credit card will have all the business expenses on it and you wouldn’t need to collate all the various bills or sort out the items from your personal credit card bill. The key here is to make sure that you use your business credit card for all your business expenses (or as much as you can). Moreover, a lot of business credit card suppliers realise this need of small business and even organise the business credit card bills in a way that meets the accounting requirements of these businesses. So mostly, they will appropriately group the expenses on the business credit card bill so as to facilitate business expense accounting. In fact, some of the business credit card suppliers go to an extent of providing the bills in a format that can be downloaded and exported to an accounting system i.e. you don’t need to enter the data manually in your accounting system. In case the format is not suitable for your accounting system, you can hire a software professional to write a small quick program to convert it into a suitable format.
Thus just one reason - ‘facilitation of business expense accounting’, is enough to support the case of small business credit cards.
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Eliminate credit card debt |
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Written by Abdul-Qadir Thamin Ayinde
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Saturday, 20 June 2009 03:38 |
Eliminate credit card debt
How to eliminate credit card debt? – A questions that is asked by a number of individuals around the globe. These are the individuals who somehow (mostly due to uncontrolled spending) landed into the mouth of this monster called ‘Credit card debt’. So what are the ways to eliminate credit card debt?
If you are looking to eliminate credit card debt, you have already reached 50% of your goal because your decision to eliminate credit card debt is the first and the most important step towards you being able to eliminate credit debt. Having said that, it is important to mention that you also need to be firm on this decision and stick to it with complete sincerity and seriousness, till you finally eliminate credit card debt (and even after that).
To eliminate credit card debt, you need planning. This starts with analysis of current situation in terms of your debt and your finances (current and as expected in near future). So to eliminate credit card debt, you need to first check the amount you owe on various credit cards. Just use a notebook to note down the amount you owe on each credit card and the corresponding APR associated with them. Once you have this information handy, you can total up the various amounts to get the total amount of your credit card debt. After all, you can’t eliminate credit card debt if you don’t know how much it is actually. The next thing is to see if you have enough cash handy e.g. in your various bank accounts, which you can put to use to eliminate credit card debt (of course, you will need to take a view on how much cash you will need to fulfil your day to day and specific future needs). If you find that you have enough to eliminate credit card debt completely, just go ahead and eliminate credit card debt and earn your peace of mind. However, if you can’t eliminate credit card debt completely, check the amount that you can use to eliminate credit card debt partially. Next step, as you must have guessed, is to check how best you can use this amount to eliminate credit card debt (even if partially) i.e. which portion of credit card debt should you eliminate first. So, first eliminate credit card debt on the credit card which has the highest APR and which is hitting you the most. Then eliminate credit card debt on the credit card which has the next highest APR and so on and so forth. If you are incurring additional late fees etc on some of your credit cards, you might decide to reserve some amount to make minimum payments on those credit cards (before you finally eliminate credit card debt on them).
What we have seen is just some basic analysis and first steps on how to eliminate credit card debt. You might need to take some other steps to eliminate credit card debt e.g. consolidation of credit card debt is one good option. However, it’s imperative to understand that any and all methods to eliminate credit card debt will fail if you don’t inculcate controlled spending habits.
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Written by Abdul-Qadir Thamin Ayinde
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Saturday, 20 June 2009 03:26 |
It comes as a surprise how credit cards have found their way into our lives (and out wallet). Credit cards have gradually turned into becoming a necessity (rather than luxury). You can find credit card processing machines in almost all the shops today. With the advent of internet, online credit card processing has become popular too. ‘Credit card processing’ as such is a really interesting topic. This article tries to put into perspective the people, systems and the equipment that go into credit card processing.
First, let’s check the equipments used for credit card processing. So, there are credit card processing softwares for online credit card processing, there are credit card processing machines (i.e. the credit card reading machines at shops), there are data verification/validation devices/softwares that verify the security information on credit cards, there are communication devices/systems that enable safe transfer of credit card information from one point to another, and then there are other credit card processing equipments like the credit card processing equipment that is used for the preparation of the actual plastic (credit card).
Then there are various service providers that provide services related to credit card processing. There are suppliers for credit card processing equipment and suppliers for online credit card processing services. Then there are postal and courier service that help deliver credit card bills in time. There are merchants/petrol-bunks etc which provide facility of payment collection boxes at their premises (another important aspect of credit card processing).
Besides that there are complete systems for processing credit card applications, there are systems for credit card bill processing/generation, there are people at call centres who help in addressing the queries from credit card holders and, very importantly, there are people (sales representatives) who help you in filling the credit card application forms. Another important entity with regards to ‘credit card processing’ process is the credit rating bureaus. Credit card bureaus maintain a database of credit ratings for individuals and businesses. This rating is based on the data received from various credit providers over a period of time. This rating is the most important part of credit card application processing and a bad rating can lead to rejection of the credit card application altogether.
Thus, credit card processing involves a coordinated effort from a lot of professionals and service providers. In that sense, we can also say that credit card processing is an industry in itself that has generated a lot of employment.
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Written by Abdul-Qadir Thamin Ayinde
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Saturday, 20 June 2009 03:33 |
Credit cards have gained so much popularity amongst the masses that no business can be termed as complete and efficient if it doesn’t use credit card services. Really, without credit card services, most of the businesses would end up losing a significant chunk of business opportunities. Some people go to the extent of classifying such businesses (which don’t use credit card services) as non-serious businesses.
So what are these credit card services that we are talking about?
In simple words, by credit card services we mean the ability to accept credit cards as a mode of payment. Well, we can also term the use of credit cards as a credit card service. However, generally, credit card services will include the services that enable acceptance of credit card by a merchant. So, for a shopkeeper, use of credit card processing machines to accept credit card payments, is a credit card service that he is providing to his customers (and he himself is receiving this credit card service from the provider of credit card processing machine and others involved in making this process so smooth). Since carrying cash is no more a common practice, any shop that doesn’t use/provide such credit card services would end up losing a lot of customers because customers can’t pay with anything other than a credit card. So, for most merchants, providing credit card services (or credit card processing services) to their customers, has become very essential part of business.
With the internet boom, came a lot of online businesses. These businesses were in the form of virtual shops (or e-shops) that existed either only on the internet or were a virtual extension of physical shops. All these businesses (some selling goods, some selling services), needed a way to accept payments from their customers. This gave birth to online credit card services. The simplest use of these online credit card services is in the form of a simple webpage/web-form that asks you to provide your credit card details. These details are then verified and processed to debit the amount from your credit card and credit it to the merchant’s accounts. Since credit card details are sensitive information, these websites started implementing mechanisms/technology to secure it and prevent it from getting in the hands of fraudsters. Such sites are now called secured websites and form the backbone of e-commerce.
Besides these basic ways of implementing credit card services, the credit card services are provided in some other forms too e.g. over-the-phone payments using credit cards, use of third party online credit card service providers who provide you with an interface to accept credit card payments.
So, there are a lot of different ways in which credit card services are implemented and as the time goes by, the expanse of these credit card services is sure to increase.
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Credit card debt consolidation |
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Written by Abdul-Qadir Thamin Ayinde
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Saturday, 20 June 2009 03:21 |
Credit card debt consolidation
Credit card debt is a nightmare of a problem and unfortunately there a lot of people who face this today (and if others don’t pay heed, they might get trapped into credit card debt too). Credit card debt consolidation is generally regarded as the most important step in credit card debt reduction and elimination.
So what is ‘Credit card debt consolidation’?
Credit card debt consolidation is the process/strategy to consolidate debt from multiple credit cards into lesser number of credit cards (ideally one or two credit cards). Credit card debt consolidation is sometimes also referred as a balance transfer where you transfer your balance on one credit card to another credit card. Generally, the balance transfer (or credit card debt consolidation) is done from credit cards with higher APR to credit cards with lower APR. Credit card debt consolidation can also be achieved by going for a bank loan (at a lower interest rate) and using that towards paying the debt on the higher APR credit cards. This loan is then paid-back to the bank in the form of monthly instalments.
As you would have noticed, a lot of credit card suppliers and banks keep coming out with attractive offers for Credit card debt consolidation (or balance transfers). There is no dearth of 0% APR offers for credit card debt consolidation. However, credit card debt consolidation is a serious exercise and you must exercise caution so that you don’t get into deeper trouble. When going for credit card debt consolidation, you must properly analyze the offers from various banks and credit card suppliers. Check the time period for which 0% APR is being offered and also the APR that would be applicable after the lapse of that period. Generally, 0%APR is valid for a 6-12 month period only. So, if you are confident of paying back a considerable amount of debt in that period, this kind of credit card debt consolidation will work for you even if the APR (post 0% period) is a bit higher. However, if that is not the case, the long term APR is going to be the most important thing for you. If the long term APR is more than the APR for your current credit card, this kind of Credit card debt consolidation will be futile for you. Also, check processing charges etc before you actually go for balance transfer or credit card debt consolidation with another supplier/bank. Another good idea is to check with your current credit card supplier and see if they can offer a lower APR to you in order to help you in clearing off your debt (you would be surprised that they do oblige at times and hence eliminate the need for credit card debt consolidation).
It’s important that, with credit card debt consolidation, you also inculcate good spending habits; otherwise credit card debt consolidation would really be of no use to you.
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