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 realized 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 realize this need of small business and even organize 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.

Labels: business, business credit card, card, credit, helpful

If you ve done any searching on the Internet for information pertaining to Credit Repair, you ve no doubt found that there s a great deal available. Unfortunately, there s also a lot of misinformation as well.

Let s take a look at some of the most common misstatements you ll come across and examine them in detail.

MYTH #1

Credit repair doesn't work!

While it s true that credit repair is more art than science that s not to say it doesn t work. If you undertake to repair your bad credit score, there s never any guarantee you can restore it to perfect status. But sometimes you can, and in almost every case you can at least affect some improvement in your credit score, and often major improvement at that!

First of all, credit reports for the most part are filled with errors. While there seems to be no general agreement, it s estimated that anywhere from 1/3 (Attorney General of NY) to as many as 90% (Charles Givens Organization) of credit reports contain errors.

Removal of erroneous negative information alone will go a great way toward improving your credit score. But there s more to the story, which brings us to myth #2.

MYTH #2

Negative information that can be verified cannot be removed

This is one of those statements that are almost true, but taken literally is misleading. As is often the case, the inclusion (or exclusion) of one seemingly small word makes the difference in a truthful statement, and one that s not (or not necessarily) accurate.

Let s take an analogy. Suppose it s the middle of summer, and your grass has grown unusually high. Let s also suppose that you own a lawn mower, it s in good working condition, and has plenty of gasoline in the tank.

Now let s say that you re sitting on your couch and say to yourself My grass will get cut today because I CAN go outdoors anytime and cut it.

So will your grass get cut? Not necessarily! Just because you can go outdoors and cut your grass doesn t mean it s going to get done. You can repeat this statement to yourself all day long, but your grass isn t going to get cut until you actually go outside and DO it!

Likewise, because a negative item on your credit report can be verified doesn t mean it will be. According to the Fair Credit Reporting Act, a credit bureau must investigate and verify within a reasonable period of time any item in your credit report that you dispute. If the information is found to be inaccurate or can no longer be verified, the consumer reporting agency shall promptly delete such information.

Now in this context can be verified clearly means verified by the credit bureau s investigation of the item, and the reasonable period of time has been established (by subsequent rulings) to be 30 days. So if the credit bureau doesn t complete its investigation of the disputed information within 30 days, or if for some reason the creditor fails to respond and verify the information, by law the disputed data must be deleted from your credit file.

MYTH #3

Credit repair agencies are all scams

It s true that there ARE a good many unscrupulous credit repair agencies. But there are also some corrupt police officers, lawyers, and politicians. Yet we don t label all members of these professions as corrupt.

If you re looking for help to repair your bad credit you do need to be careful and do your homework when selecting an agency. There are many honest credit repair companies that are not scams. But beware of any who make promises as to results!

As stated above, it s not always possible to restore your bad credit history to perfect status, and no one should be making any promises to that effect. Beware of any company that does! And while an agency will in all likelihood be able to improve your credit score, if any agency makes this promise, be sure it s accompanied by a money back guarantee. Otherwise, look elsewhere. And don t forget to ask for references and follow up on them.

MYTH #4

You have to hire a credit repair agency or lawyer to fix your credit

Going back to the analogy above, you can always hire someone else to cut your grass (or to do just about anything else) for your. And if fixing your own credit seems an intimidating task, you might prefer to hire a credit repair company to do it.

But it s not really necessary that you do. First of all, credit repair agencies aren t cheap. You can expect to pay anywhere from $2,500 to $5,000 or more. Plus, you ll be paying a high fee for something you can just as well do for yourself, which brings us to myth #5.

MYTH #5

It s too difficult or complicated to fix your own credit

A credit repair company isn t going to do anything for you that you can t do for yourself! Credit repair isn t rocket science. It involves writing letters to credit bureaus and to creditors. If you re able to write a letter, put a stamp on it and mail it, you re able to repair your own credit.

Given the proper knowledge, you can fix your own credit

This statement IS true! You re entirely able to repair your own credit, given the proper knowledge. And given the proper knowledge, you can fix your own car, repair your own plumbing, or for that matter perform brain surgery.

While fixing your own credit is relatively simple and straightforward, you do have to know how to go about it. Essentially it involves getting a copy of your credit report and writing letters to the 3 major credit bureaus disputing negative information in your file.

But there s a right way and a wrong way to do it. In fact even some of the high priced credit repair agencies get it wrong, which brings us to myth #6.

MYTH #6

You improve your credit score by getting all the negative items on your credit report removed

It s possible to get all the negative items on your credit report removed and actually see you credit score go DOWN as a result! The reason? Your credit score depends on a number of factors, one of which is the length of your credit history. In some cases, you re better off to NOT remove some negative items on your report, especially if they involve a few late payments in the distant past, but show timely payments during recent years.

While the nuts and bolts of credit repair is beyond the scope of this report, there are a number of sources of good information online. If you have bad credit, there are 3 major points you should keep in mind:

1. If you have a bad credit history, it can (and probably will) cost you many tens of thousands of dollars in higher loan interest over the years, as you ll be charged much higher rates than you would be with good credit. If your credit is really bad, you may not be able to get a loan at all!

2. The situation isn t hopeless! In almost every case you CAN improve your credit score. You can easily do it yourself or find a reputable agency to do it for you. But in any case, GET IT DONE!

3. If you choose to repair your own credit (recommended) there are good books and eBooks available that can walk through the process. Get hold of one and get started NOW!

By: Jim Eastman

Labels: business credit card, credit, myths, repair

If you haven't had the credit limit cut on your credit card recently, count yourself lucky. Risk-averse card issuers are getting slash happy. And while many cardholders gripe that such cuts slice razor-close to their balance amounts, for an unfortunate few the cuts go far deeper: below what they currently owe.

Under different circumstances, David Chaplin-Loebell wouldn't have minded that American Express cut his unlimited credit line to just $5,000. Except that when AmEx reduced his line in October, he had an outstanding balance of $10,000. "I found out by having a business purchase declined," he says. Repeated calls to AmEx failed to yield an answer about why the cut was made. Chaplin-Loebell, who lives in Philadelphia, is now paying the balance under his regular card terms, and presumes the line will free up for new purchases once he's below the limit. "For now, they've essentially frozen the account," he says, leaving him to juggle business expenses on his personal cards. American Express did not respond to requests for comment.

Nasty as it may be, the practice of cutting credit lines below the balance is legal -- at least, for now, says Chi Chi Wu, a staff attorney for the National Consumer Law Center, a consumer advocacy group. Federal Reserve rules requiring lenders to give cardholders 45 days notice before reducing a credit line to the point that it would trigger penalties won't go into effect until July 2010. "[Until] then, there are no federal protections," says Wu.

Congress is also hoping to rein in unscrupulous credit-card practices. In February, Sen. Chris Dodd (D., Conn.), chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs, reintroduced the Credit CARD Act, which among other things, offers cardholder protections like the ability to pay under the existing terms if an account is closed and requiring issuers to lower penalty rates within six months once a cardholder gets back on track with payments. Earlier this month, the House Committee on Financial Services chairman Barney Frank, announced a series of four hearings that will include discussions about credit card reform.

SmartMoney.com contacted both committees to see if they were aware of issuers' practice of cutting credit lines below balances, and if they planned to address it in upcoming hearings. Neither responded to requests for comment.

The motivation among issuers to make such deep cuts that they plunge below a cardholder's balance amount isn't very clear. Usually, issuers cut credit lines to reduce outstanding liabilities -- they sometimes may even chase the balance on riskier accounts with further limit cuts as cardholders pay down debts, explains Bill Carcache, an analyst with investment bank Fox-Pitt Kelton. But cutting below the balance doesn't reduce an issuer's liability: The cardholder still owes the outstanding debt.

One possibility is that this is yet another attempt by card issuers to get consumers to close their accounts (while bringing in a little fee income in the short term), says Dennis Moroney, research director and senior analyst for consulting firm Tower Group. "I can't rationalize in my mind what other motivation there would be," he says.

Paul Pensabene of Saratoga Springs, N.Y., received a statement from HSBC on Dec. 8 that said he had a $359.99 balance and remaining available credit of $8,640. But when he went online to pay the bill several days later, his online account showed that same balance put him over his newly-reduced credit line of $300. And that didn't include the $35 over-limit fee. Pensabene grappled with customer service until they agreed to remove the fee, and then paid the balance in full. "All I could think was, 'Good lord, what if this is happening to someone that couldn't pay their balance off in one shot?" he says. "They'd end up in default with these fees piling up."

HSBC declined to comment on individual cardholder accounts. Spokeswoman Cindy Savio says the issuer has tightened its credit standards based on the economy. "As we have previously stated, in an effort to reduce credit risk and refine strategies for our card business, we have tightened credit standards, reduced or canceled higher risk credit lines, and closed a number of inactive accounts," she says.

While the fees, frozen accounts and default interest rates resulting from credit-line cuts can sting your finances, they can do some serious long-term damage to your credit score. Your credit utilization ratio -- the total amount of debt you owe in relation to the amount of credit available to you -- accounts for roughly 30% of your score. A credit line cut has the potential to decrease your score by 50 points or more if you don't have much other available credit, says Craig Watts, spokesman for FICO, the company that calculates and issues the credit score that most lenders use.

Even cuts that are close to the balance have the potential to devastate if they're not caught quickly. Luckily for Carol Gressett of Decatur, Miss., she noticed the reduction in her Discover-branded Sam's Club card limit just days after it happened. The limit was cut to within $100 of her $3,000 balance. The official letter notifying her of the reduction arrived three weeks later. "We could easily have gone over if I hadn't been paying attention," she says.

(A Discover spokesperson says GE Money issues the cards, and so is responsible for managing credit lines. GE Money did not respond to requests for comment.)

By Kelli B. Grant

Labels: business credit, business credit card, card, cards, credit, limit

Deciding to apply for a credit card is not a decision you should take lightly. Many stores try to get you to impulsively apply at the register, and you should never agree. Credit cards can affect your financial situation for years so you should certainly think before you act. If you want to apply for a credit card, there are a few steps you should take beforehand.

Evaluation

Before you apply for a credit card, you should do an evaluation of your finances. Get a free credit report and make sure everything is accurate. You will want to know what your credit score is so you will know which cards to look at when you apply for a credit card. If there is anything unusual or incorrect on your credit report, deal with it immediately. Many people never look at their credit report, and therefore have no idea what may or may not be on it. It is important to clear up anything incorrect on your credit report before you apply for a credit card.

Research

After getting everything strait with your credit report, you should begin researching. Research cards that fit your credit score. Make a list of important characteristics you want in a credit card. Look for the best deals in several areas. Before you apply for a credit card, you should make sure you understand everything about the card and the company's policies. Look at the interest rates, rewards programs, and other characteristics.

Be wary of great introductory offers. When you apply for a credit card, many companies will offer you fantastic introductory deals. It is great to take advantage of these deals, however you should be sure that the terms won't change unexpectedly after the introductory offer time period is over. For example, you will need to know what the interest rate will be after the offer before you apply for a credit card.

Conclusion

Once you find several credit cards with terms that you understand and like, categorize them by your choice. Apply to one at a time. If you only need one card and apply to three, you run the chance of getting approved for all three. This will not only reflect on your credit report, but also give you the inconvenience of canceling two of them. So, be patient and wait for a response.

When you apply for a credit card, you are vowing that you will be responsible financially. Deciding to apply for a credit card means that you know you will be able to pay the balance off in a timely manner. If you are not sure of your ability to pay, you should never apply for a credit card. Be responsible, examine, and research before applying!

By Morgan Hamilton

Labels: apply, business credit card, card, credit, how, tips

Credit cards are wonderful financial tools. They provide comfort and ease of use when purchasing goods. They provide a peace of mind and liability protection. But credit cards can also be a dangerous vicious tool when not used correctly.

Credit card debt is a big problem in the United States. There is something magical about the ability to go to a store find a product that you would like to purchase and then go to the cashier and be able to walk away from the store with that product by online swiping and plastic card and signing a small piece of paper. Using credit cards can be too easy which can be risky as consumers lose touch with money and with how much they really spend.

The problem with credit card being too easy is that in contradiction to cash which as a tangible feel a credit cards does not. An example would illustrate it. Lets say that you are at a store and would like to buy a product that costs four hundred dollars. If you were to pay in cash you would see in a very visible way the about of money you paid. You will have to count twenty dollar bills and would see how they pile up. This will in turn give you a better understanding and a better feel of how expensive that product is. There are many more bills to count and there are many more notes on the table when buying a four hundred product as opposed to a twenty dollar product.

With credit card this ability to visualize the cost of a product is lost. Regardless of the cost of the product the process is always the same and always takes the same time and requires the same tangible elements. The process is simple the credit card is swiped on a special payment terminal. The terminal then prints a slip on which you have to sign. Once the slip is signed the deal is closed and the charge is put on your card. The only difference between buying a four hundred dollar product and a twenty dollar product is the number printed on the slip which has no tangible visualization.

Using cash allows people to get a feeling of how fast they fun out of money. If you have five hundred dollars in your pocket and you buy a four hundred pocket it is very visual that you are left with not much. For most of us being able to estimate the sum of many small charges on our credit card is very hard. Ask most consumers when they get their credit card monthly statement if they can guess what would the total be and most of them would guess wrong usually assuming it is much less than what it really is.

The first step to solving this problem is awareness. Consumers that are aware of that problem can do many things. They can combine using credit cards when they are really needed and cash in all other times. They can also make sure to login to their credit card online account to see live updated list of charges on their card and the total thus constantly being aware of how many charges they are accumulating on the card.

By Mac Eaton

Labels: bad credit, business credit card, credit, debt, finance, home, loan, money, mortgage