Month: January 2017

How To Solve Rolling Over Credit Cards

A pocket full of plastic money gives one a feeling of success and security. Using your credit cards for purchases is so easy, choose what you want to buy and pay for it with a piece of plastic instead of cash: bought, done. That is fine as long as you keep your spending limited within your monthly income and pay the full amount of your accounts by the date due. Unfortunately, in many cases, there is not enough income to cover the payments. This starts many people to begin using two or three or even more credit cards, making payments by rolling money from one of them to another in order to survive.

Credit limits

Use of cards comes with a credit limit that you can buy for. This is set by the bank issuing it and is dependent on monthly income. Each bank has a different limit setting as well as some of the cards having budget payment facilities where as others do not offer this kind of service.

Acquiring a card is usually easy to get as long as you qualify financially. In fact, the banks are only too willing to give them to you so they can make some easy money. The bank charges on overdue card payments are high and it is not difficult for people to end up not meeting their commitment by the due date. Instead of being careful about their spending they run up their cards to the maximum. If you have surplus money rather put it into a savings account and gain interest.

Making minimum payments

If you only pay the minimum amount due on your credit card you are going to end up paying astronomical amounts of interest that compound monthly. Overall, it is far wiser to pay the full amount due as hen all you have to pay extra is the monthly charge for card usage.

Applying a sensible strategy to spending is the best way of making monthly purchases. A credit card is ideal for paying grocery shopping, or, for any other items needed for the household, or any other payments. The problems with plastic purchasing arise if you overstep buying your necessities and spend freely on expensive unnecessary luxury items.

Costs of living today have risen to such an extent that it is difficult to maintain the standards you are used to and which was the normal way of life in the past. Thrift has unfortunately had to enter our existence on a daily basis.

Worldwide there are many people now forced to live far beyond their means. This encourages rolling over of their credit cards in order to continue the existence of a lifestyle in the way they are accustomed to. This eventually is going to prove such a financial strain that many people will find they have to resort to downsizing their homes, cars, schools, and forms of entertainment expenditure in order to be able to survive. Otherwise, they will be without money, credit cards, and bankrupt.

Guide To Choose The Best Corporate Credit Cards

When it comes to business privileges and perks, one of the most common ones that employers give to their employees are corporate credit cards. Although this does not necessarily mean that you can use this card anytime and anywhere you want to as this is limited to company rules, still this gives you convenience and security whenever you are in a business trip.

And having said this, it is very important that you know how to choose the best ones. Here are some tips that you can use as your guide in your selection.

  • Choose a corporate credit card that offers high spending limit. There are different types of cards and these offer different spending limits. Depending on your job position or your role in the company, it should provide you with just enough spending limit so you can pay for the things and services you need.
  • Choose a corporate credit card that has specific perks. If your company requires you to travel a lot for business or to meet up with some clients abroad, you should choose a card that gives travel perks. There are several different types of cards and all of them offer several different perks. If you are assigned to make or close deals with clients, it is best to choose a corporate credits card that offers dining privileges. This is best for those who regularly meet up with clients over lunch or dinner.
  • Choose a corporate credit card with easy payment option. This is usually an arrangement between the issuing bank and your company. Some companies prefer to have their cards linked to their corporate bank accounts so that payments are taken directly from the accounts. This is a convenient and hassle-free option to save time and effort.
  • Choose a corporate credit card provides 24/7 customers service options. This is actually very important especially if you are travelling abroad or internationally when you need to call for assistance for certain circumstances such as lost card or captured card. Having a 24/7 customer services assistance is perfect to make sure that you are covered anytime of the day. Business owners may also need to update some card restrictions especially when an employee is no longer connected with the company and calling the bank that provides 24/7 customer assistance is a huge advantage.

These are only some the factors that you need to consider when choosing the best credit card to use for your business. Know more about corporate credit cards here.

This Is How Corporate Credit Cards Work

When used wisely, corporate credit cards can definitely help businesses simultaneously achieve career goals and reap personal perks. On the contrary, this can lead to a corporate free-fall when used poorly.

Corporate credit cards are different from both personal and small business credit cards. These are offered only be a few issuers. Generally, such accounts are established by businesses by utilizing a banking relationship or through a deal negotiated directly with a card issuer. In order to develop such kind of relationship, the company’s credit will be considered.

Companies may give their employees with corporate credit cards for the payment of business-related expenses, which are often travel-relation. Though it is often issued in the company’s name, be aware that it can also display the name of the employee cardholder.

They are categorized into 2 – individual payment cards and company payment cards. Those who opt for individual payment cards, they will be the ones responsible for submitting their own expense report. Also, they will be paying the issuer directly for any charges. On the other hand, the employer will pick up the tab for all company-sanctioned changes with the company-payment cards. But for any personal or unapproved charges, the employee will still pay the issuer directly.

Tips When Using These Cards

Be aware of your company’s policies – Cardholders must familiarize themselves with the reporting and spending rules provided by their employers. Also, they must educate themselves about the policies specific to their position or department. They need to know the types and limits on making charges. It is highly recommended that cardholders must attend training sessions and be updated on the policies.

Learn how to avoid pitfalls – There are indeed a lot of pitfalls cardholders must avoid. These will include the unapproved charges that can end up hitting your wallet and combining personal expenses with business spending that may put you on a collision course with the management.

Use your common sense – The lack of simple common sense is indeed among the biggest dangers from having corporate credit cards. Prior to swiping it, ask yourself if such expense is directly related to your job.

Always secure your card – Be sure to keep your card in a safe place to avoid theft or loss. Immediately after noticing that you have lost it, report it to the authorities. This will help prevent fraudulent charges. Cardholders must be aware that when they have lost their card, they can be provided with a new card or new account number immediately during emergency cases.

Avoid These Credit Trap

Our eldest daughter recently graduated from college (1 down – 3 to go). She headed West to take an internship that will assist her in obtaining some certifications that she needs. During her college years our mailbox was filled with Student Loan companies making sure that she knew that they were there for her – to lend her what she needed to complete her degree. Now that she has her degree – our mailbox is full of offers from credit card companies offering her the credit that “she needs” to get her life in full gear.

I have been shredding the offers as quick as they come into the house. And I have shared with her the trap that these companies are setting for her and her contemporaries. Last week instead of shredding the offers – I let them accumulate in a pile on my desk. We opened them and the first few sentences of each letter was quite eye-opening.

“You worked hard to achieve your degree and that hard work earned you our respect… “

“Congratulations on achieving your college degree. As you begin your professional life you may need to rely on credit to get you started… “

“Great job. Let us reward you with a great opportunity to assist you to build your credit rating… “

Here is the normal way that this ends up for our young adults. As the offers come in the recent graduate accepts a few of them – feeling great that their hard work has been recognized and with the noble objective to have the cards in case of an emergency. The card companies may tout credit limits in the $1500 to $2000 range – but the reality is that once the applications are submitted – unless the graduate has already achieved excellent earnings – most times they will be given a smaller limit – in the $500 range.

Once they have the cards the temptation to use them becomes almost impossible to overcome. Perhaps it’s a piece of clothing, or a night out with friends, or even the purchase of a gift for a loved one. The intent – as we all know – is always the same. “I will use the card to purchase this… and I will pay the balance off when the bill comes in”. Then when the bill comes in and the minimum payment is only $25 – most will pay the minimum because they have other cash flow needs that seem more important at that time. And this cycle repeats itself month after month.

The credit companies will start to offer increases in credit limits as time moves forward. As they see payments being made on time – that little limit of $500 – moves to $750 – then to $1000 – then to $1500. Move the clock ahead 5 years and these young adults can find themselves in $20,000 plus of credit card debt – paying minimum payments of $500 per month – and in reality making no dent in the principal balances. It is a cycle of financial paralysis.

My suggestion to you is that you share this with any young adults in your circles. Make sure they know what is at stake and why these companies are trying their best to get them into a revolving credit nightmare. Explain to these young adults the concept of “delayed gratification” – instead of what the credit companies are offering – “instant gratification”.

Credit is important – no argument there. But the proper utilization of credit and understanding the pitfalls is equally (if not more) important. Spread the word.