How to Manage Business Credit Card Debt

When just starting a business, or extending an existing one, there is definitely going to be some sort of debt involved. This debt should only be what you would expect it to be, and what is covered within your business plan. If your business doesn’t do well, you will have a price to pay, especially when it comes to your businesses future.

Having a business credit card is an ideal way to purchase things that are necessary in order for your small business or new business to succeed. This card is similar to the line of credit that is given to larger and further established companies.

The fastest way to get a business credit card is to apply online. It works similarly to a personal credit card and it needs to be used responsibly so that you and your business can avoid going into a debt trap that is extremely hard to escape from.

You probably appreciate how credit card companies feel when people do not meet their payments when they should be met, or those people who skip an entire payment altogether. This will probably happen from time to time with your own customers. If you are having problems making the payment by the due date, you can easily ask the company to alter the date so that you can avoid late fees or fees for not paying at all.

The business credit card comes with a lot of benefits. It can be seen as a privilege loan and can be used when needed. However, this should only be taken advantage of when there is no other choice. If you keep visiting the ATM and taking out 0 here and 0 there in place of a cash system, it all soon adds up, and the high interest will come into the picture because many credit cards put high rates on advances that are much higher than the balance on the card. It’s very important that basic bills are paid each month. To do this, set up direct payment from your business credit card online to the vendors you work with.

Instead of distributing many checks to different people, you can simply write out one check to cover all of them. This makes accounting a lot easier. This also allows you to keep track of payments records that can be checked at any time.

All businesses at some point will deal with fluctuations, some are predictable because of the season, and others are unexpected. This is why it can become very important to keep up with debt payments so that you have things to fall back on if need be.

A good credit rating comes in handy at times when you need to do cash advances. You will have met your payments on time and you will have used your card how it should be used. This will help you make it through leaner spells.

Business Credit Cards are a Better Way to Manage Business

Business cards still have an application and approval process, still include an interest rate on purchases, and still have an impact on credit scores. They are available with low APR, zero introductory interest rates, balance transfer options, rewards, like airline miles or cash back, and on and on. Business credit cards are similar to personal credit cards in how they are obtained, how they are used, and how they work, however business credit cards also offer unique business oriented benefits and generally offer high lines of credit. They also offer travel discounts on cars and hotels, travel insurance, and even restaurant savings. The truth of the matter is, business credit cards will help your business grow and there is no doubt about it.

Business owners also understand that securing a business credit card early on in the life of the business, helps the business to build its credit track record; and that the sooner a track record is established, the sooner the business will be able to carry the business credit card liabilities on its own. These cards have gradually become one of the most common forms of business credit that assists businesses meet their urgent requirements, even when there is a deficiency of cash. Businesses, both large and small, are no different from private consumers when it comes to the benefits of credit cards, and many businesses rely on the convenience and flexibility of these cards in order to aid the smooth running of their finances.

Business credit cards often secure preferential exchange rates to the business traveler and business credit card issuers also arrange for worldwide emergency and travel assistance. Currently, business credit cards offering zero percent interest rates and reward rich incentives are advertised widely and these types of business cards are going to be more widely marketed to small business owners in upcoming months.

Business credit cards are accepted virtually everywhere, which is great for those who need equipment or supplies in a hurry. Business credit cards are usually issued to corporate executives or business owners in order to more easily keep business expenses separate from personal charges. Business cards for businesses in general, and for small business in particular, have become increasingly popular as more and more businesses start to realize the benefits. Business credit card volume has grown 20% annually since 2000 and business cards can be issued to more than one individual. They are a great way to increase cash flow and solve cash flow problems.

Business Credit Cards are wonderful financial tools for all types of business. But there are drawbacks to small-business credit card usage as well. A business credit card carries the same personal liability as a personal card. So if the business defaults on credit-card payments, a creditor can come after the person who signed the card for payment. Moreover, your small-business credit card will be noted on your personal credit reports and a few late payments could seriously damage your personal credit score, while a big debt increase by the business could make you look more overextended than you really are, regardless of the payment history. Still, no matter what, once your business has established its own credit history, you should be able to remove your small-business credit card from your personal credit reports. One other word of caution: because business credit cards are meant to be used by companies, not consumers, they come with fewer consumer protections than a personal credit card.

From the above, you can see that the vote is in. Business credit cards are wonderful financial tools for all types of businesses. And, if you do not have one for your business now, perhaps you should be considering getting one in the near future. After all, financial tools that come with great features and benefits are a business necessity.

Credit Crunch Still Affecting Personal Finances

The effects of the credit crunch are still having an effect on people’s personal finances and the country’s economy has not yet returned to its normal state, it has been claimed. Economist at the Centre for Economics and Business Research Charles Davies said that both consumers and businesses are being affected by the credit crunch, with growth continuing to slow.

And not only is the credit crunch biting people’s finances, continuing inflationary pressures are also having an effect, Mr Davis suggested. Indeed the British Chambers of Commerce recently reported in its Quarterly Economic Survey that there is now a serious risk of recession across the country.

“The situation has still not really completely normalised and what you have seen is the effects of it start to seep through to all different sectors of the economy. Clearly, the financial system is fundamental to the functioning of the market economy and as funds drying up have had an impact on firms, there has also been a very great impact on consumers,” said Mr Davis.

He added that this has had an ongoing effect on the housing market and that banks are still reporting weaker results than in the past few years. Indeed there is still a level of uncertainty about banks recapitalising, he added.

But people who are perhaps feeling the effects of the credit crunch may now wish to consider the benefits that a secured loan can bring to payments, as all debts can be consolidated so that monthly outgoings can be paid off in one. Such a move may prove to help minimise the effects of the credit crunch, as outgoings can be kept under control.

Mr Davis noted that the inflationary pressures on the economy are proving to be a “dual hit” on the country’s purse strings and are making things “very difficult” for people. A recent study conducted by Nationwide, in partnership with TNS, found that consumers are now less confident than they were about the overall state of the economy, borrowing and loans on the whole.

The research, published in the Nationwide Consumer Confidence Index, found that overall consumer confidence is now down 18 per cent on the level it was at last year. Spending has also fallen, to stand at 54 points in July this year, down from 65 points the same time a year before.

Indeed some 61 per cent of people do in fact believe the current economic situation is bad and some 85 per cent are of the opinion that the situation will get worse over the coming half-year. And opting to take out a loan to help cover any outgoings may be one way to cover costs such as mortgage or debt repayments.

Last month, research from mortgage advisory group mform found that people looking for new mortgage deals are now seeking out longer-term deals. Indeed the organisation found that some 11.5 per cent of people wanted to sign mortgage deals for the duration of their borrowing period and some 13.5 per cent of people wanted deals of longer than five years.

Credit & Debt Management Businesses Sustainable models in Recession 2009

By this time every one is able to analyze the effects of recession and its impacts on the global markets,  there is nothing like a recession business model but yet some business models do much better even in recession periods.

The recession creates a need to build business models that can offer better sustainability even in tough times, so let’s focus on some of those areas.

The cause of recession would make many people loose their jobs, foreclosures, damaged credit ratings and increasing levels in debt.

This situation creates a need for credit and debt management businesses. Try to have a deep understanding about both ends and than analyze how you could fulfill that need.

This is going to be a very responsible job because you even need to consider the emotions and personal problems of people and judge their needs for not being in a position to pay the amount.

On the other end you need to help the bank survive, and fulfill the basic purpose of doing business,  if not every one is going to get effected,  just like the recession going out there.

This is more of services based,  that makes best use of you conversing skills and you capabilities to provide a best solution to fulfill gap between people and lenders.

The recession creates a need to build business models that can offer better sustainability even in tough times, so let’s focus on some of those areas.

At least once every three months, or if you cancel or terminate your agreement, the DMC must provide you with a statement disclosing the amount of funds received from you and the amounts and dates that payments were made to your creditors since the last report

Business listing

Personal Finances – K.i.s.s.ing your Checking and Credit Card Accounts

My Dad and father-in-law were at both ends of the spectrum when it came to managing their checking accounts. Dad would spend hours, sometimes days, tracking down a two cent error in his checkbook register. It drove him bonkers when his checkbook didn’t balance to the penny with the account statement.

My father-in-law, on the other hand, didn’t even keep a checkbook register. He couldn’t be bothered with balancing his account. His philosophy was, “If I run out of money the bank will let me know.” That is a hands off approach that few of us can get away with, but, it worked for a person that was born and lived in a town of less than 800 people. The bank did, indeed, let my father-in-law know when he was overdrawn. They never, to my knowledge, charged him overdraft fees.

That approach can work in a small town in Northern Idaho. Most of us, however, do not have that kind of a relationship with our bank. In order for our personal finances to run smoothly, it is our responsibility to make the lifestyle choices, and do the work associated with managing our day-to-day finances. How we handle our checking account and credit card transactions is fundamental to keeping things running well.

My Approach Is Somewhere In The Middle

My approach to managing our family checkbook register is somewhere between the two parental extremes cited above. My wife, Lois, and I record all transactions in our register and, like clockwork, I balance our account every month. What I don’t do is spend an unnecessary amount of time trying to find errors when our account doesn’t balance with the statement. If the error is within comfortable limits, I adjust the account balance and then get on with my life. What’s a “comfortable limit?” That depends on the account balance. My error tolerance is directly proportional to how much money we have on hand when the error occurs. Balancing errors don’t happen very often. More often than not our checkbook balances to the penny. The accuracy can be attributed in some measure to the fact that I use personal finance management software.

The point is that personal finances do require some work, but, perfection may not be desirable. There are a lot of people involved in the processing of the various transactions each of us generates as part of our monetary lives. Those millions upon millions of transactions, large and small, are all subject to our own human error as well as the human errors that can be committed by all of those people behind the scenes who we rarely think about. It behooves us, therefore, to keep tabs on the pulse of our personal finances as recorded in our checkbook and credit card accounts. This ongoing monitoring can be psychotic or a normal, healthy part of our lives. It’s up to each one of us to decide where we stand on this issue. Will we adopt a fringe behavior like one of my parents? Or will we keep it sane and simple (K.I.S.S.)?

Using Tools Imposes Lifestyle Choices

Using a cash flow management tool forces you to make choices by imposing lifestyle traits that are required if the tool is going to work as intended. That may sound intimidating, but, for a well written, user friendly program, the required lifestyle traits are not an undue burden. For those of us who are sincerely interested in having “more money than month” instead of “more month than money,” developing a few, possibly new habits need not be a harsh adjustment. The payback in financial peace of mind is very well worth it.

Choices We Make Regardless

First, let’s take a look at those habits that will make your financial life easier regardless of whether or not you use personal finance software.

* Keep your checkbook register accurate. Your checking account is probably your primary money management tool. It just makes common sense, in my opinion, to keep your checkbook register up-to-date and accurate. If you are not used to writing every transaction (e.g. checks, ATM transactions, deposits) in your checkbook register, or balancing your checkbook every month, these are habits you may want to look at developing immediately. Should you decide to use a money management program, an accurate checkbook is imperative.

* Keep an accurate record of charge transactions. If you use charge cards, keeping an accurate record of your charges and returns is also vital to the success of your cash flow management efforts. In my opinion, not keeping track of charges is a main contributor to why many people get into trouble with charge card debt. I think it is vitally important that, starting today, you keep the receipts from all of your charge transactions for no other reason than for reconciling your monthly credit card statement. If you are using appropriate personal finance software, charge transactions are entered into the program as soon as convenient. The program will, with accurate charging information, keep you informed of where you stand on your charge card debt.

Choices Imposed By Software

The following issues are specific to the successful use of many personal finance programs.

* One checking account. How people manage their personal funds is very, well, personal. For a single person, the choices are simplified. Once a person takes on a partner, however, personal finances can become complicated depending on how much financial autonomy each partner requires. Regardless of how many savings and checking accounts each single or partnered person may have, at least one checking account is normally required for use with the software. This one checking account, coupled with the program, is used to plan for and pay bills; plan and pay for planned purchases; and to smooth out weekly living expenses. The intent is for the program and it’s associated checking account to encapsulate a person’s entire month-to-month financial records.

* Pay bills on a schedule. Instead of paying bills when you receive them or when you get paid, pay your bills on the same days each month. An appropriate schedule for most people would be on the 1st and 15th of each month. The mechanics of bill payment (e.g. check, cash, online, automatic withdrawal) are entirely up to you, but, sitting down twice a month and arranging for your bills to be paid on or before the date they are due will simplify and smooth the paying of your bills.

* Pay yourself on a schedule. “Paying” yourself a fixed amount of spending money the same day each week regardless of when you receive your income will smooth out your day-to-day expenses. How much weekly spending money you give yourself is entirely up to you as is the weekday on which you “pay” yourself. The trick is to find that amount of weekly spending money that is enough for day-to-day expenses, but not so much that you don’t leave yourself enough to pay bills. An appropriately written personal finance program will automatically include your personal “payday” in your month-to-month financial projection so you can easily see whether you have correctly set your weekly spending money amount.

* Keep accurate records. An appropriately written personal finance program gives you a “forward looking” projection of your month-to-month cash flow. When using such a tool, keeping your cash flow projection current is the key to giving you a continual picture of where you are and where you’re headed. You will, therefore, have to be consistent with keeping your month-to-month financial records current. With the right personal finance software, this does not have to be a big chore like keeping track of every penny you spend, or entering and categorizing every check you write. In an appropriately written personal finance program, most of your record keeping will consist of entering bills when you receive them, entering charges as you incur them, paying yourself once a week, reconciling bank and charge account statements, and paying bills. Typically, all of this financial activity will take two to four hours per month.

Paperwork Flow

There are a couple of habits that Lois and I have developed that simplify tasks like the keeping of accurate records. When any piece of paper is received on which is recorded a financial transaction, that piece of paper is placed in our “In” basket. While most of our financial transactions are handled electronically, there are still items like charge slips, magazine subscriptions and account statements that are printed. By placing all such printed items in one place, they get recorded in our computer records accurately and in a timely manner. It is unusual for one of our paper transactions to be forgotten.

Those pieces of paper that are needed for account reconciliation, like credit card receipts, are put into a “Hold” folder after having been recorded in our personal finance software. Those pieces of paper that are not needed after being recorded are shredded or burned. After reconciling credit card statements, all of the pieces of paper for transactions that have cleared are removed from the “Hold” folder and also destroyed.

It’s a simple system, but, it works for us. As long as everyone in a household knows the “paperwork flow,” and habitually uses that flow, the chances that transactions will be lost, resulting in potential financial errors, are greatly reduced.

Being Big Brother To Your Checking Account

Another habit that I have adopted is the close, online supervision of our checking account. I’m a big fan of online banking which gives me almost up to the minute information about the status of our checking account. As part of my computer startup procedure, I take a look at the activity in our checking account. This may sound a bit paranoid, but, I’ve been able to spot unexpected activity on several occasions. There has been nothing traumatic like identity theft, but, by keeping a close eye on checking account activity I’ve caught unexpected withdrawals shortly after they happened instead of being surprised on the next account statement. The most recent example involved automatic credit card payments that I thought I had cancelled. It took two months working with the credit card company’s customer service staff to straighten that one out. Had I not spotted the first unexpected payment when it happened, our checking account could have been short by .00 each of those two months. That may not be a large amount, but, it could have been enough to cause a potential, inconvenient problem if left undetected.

Financial Peace Of Mind

All of the discussed lifestyle habits are so firmly embedded in Lois and my everyday lives that we no longer even think about them. Consequently, our month-to-month finances are smooth with few interruptions. When we do have to discuss financial issues, it’s a discussion over known choices instead of fights over who is doing, or not doing what. Money is not a source of discord in our lives like it can be for couples. Lois and I have been enjoying financial peace of mind for most of the 40+ years of our marriage. This financial bliss can be attributed directly to the unique cash flow techniques upon which our personal finance management software is based.

With Credit Cards Hitting Hardest, UK Consumers Tax Themselves With Penalty Charges On Personal Finance Options

A rise in costs for users of any financial service usually results in public outcry, why is it then that so many of those same consumers allow penalty fees and charges to accrue on their credit cards, when the problem could so easily be avoided?

The financial groups Defaqto and MoneyExpert have released a report in which the startling figure that one in five consumers have had to pay just such a charge, and while credit cards were the worst offender, a number of different personal finance services also incurred unnecessary charges. These services included charges for simple personal finance errors such as allowing an overdraft to go over the agreed bank limit, or investing in an inflexible mortgage and then paying off the debt early. In both cases either better preparation beforehand with regards to choosing the right provider (such as using an online personal finance database like Moneynet (http://www.moneynet.co.uk/credit-card/index.shtml ) or Motley Fool (http://www.fool.co.uk ) ) or taking advantage of financial options now readily available would have presented more flexible options which would not have imposed the penalties.

To take an example, credit cards allow greater control over your personal cash flow – you can pay now for a product or service even if the funds you use will not be available to you until the following month, at which point you pay off the credit card. Credit cards also have valuable incentives for their use with larger purchases, featuring, as the majority do, insurance options and traceability. However when you are making smaller purchases, say clothing or household products, then the use of a credit card may not be the best use of your money: searching for a suitable personal loan would most likely result in better short-term rates and the avoidance of penalties such as those imposed on the one in five people surveyed by Defaqto and MoneyExpert.

With the survey also producing the result that one in twenty consumers faced charges in excess of £100 it would seem that this problem is more than a trifle for a large portion of the UK population and that while there are a great number of personal finance options available out there, there are very often not used to the advantage of the consumer as they could so easily be with a little research.

Disclaimer

All information contained in this article is for general information purpose only and should not be construed as advice under the financial Services act 1986. You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

Neither a borrower nor a lender be
Shakespeare said, in Hamlet:-
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine ownself be true,

When an idea has been around as long as this one you must wonder if there is some truth in it but times have changed a lot since then so should we take any notice of it now?

It goes completely against the modern way of thinking. Few people still live by it’s mantra but the moral of what Shakespeare said is just as true today when related to loans from and to individuals. There are thousands of reputable companies to whom you will be safe to lend money to and you will be able to get your money back when you wish. Subject to the small print Terms & Conditions, of course. (more…)

Ultimately keeping you credit card safe is you responsibility. Indeed, in a worst case scenario, if it can be proven you may have been negligent in keeping your credit card safe, you may find yourself liable for the cost of all transactions made fraudulent on your account should you lose the card. To help you avoid this, here are 5 basic credit card safety tips:

Never have more cards than you need

While it is always advisable that you have more than 1 credit card, in case it gets lost, you should never have more credit cards than you actually need to use. The principal reason why this is the case is because it becomes harder to keep a track of which cards you have and where you have kept them with the more cards you have. (more…)