THE INS AND OUTS OF CREDIT SERVICES
To the average consumer, credit services can appear complicated, confusing and foreboding. There are a multitude of options for consumers as well as merchants, in choosing which credit services they need. Some of the more important details that consumers and merchants need to understand about these services are often buried in fine print. In this article, we will remove the mystery from these credit card services so that consumers can make better-informed decisions when deciding which of these services are right for their specific needs.
* Credit card balance transfer *
Credit card balance transfer offers are the most common marketing method that credit companies use to entice customers of other credit card companies to make the switch over to them. When you are paying over 15% on interest an offer from another credit card merchant is very enticing.
Balance transfers work by allowing you to transfer all or part of your existing credit card balance over to the new credit card (upon approval). Typically balance transfers come in the form of permanent fixed rate offers or short-term low rate offers. Both of these terms are described in more detail below.
* Balance transfers *
In addition to using either fixed rate or low rate offers to perform balance transfers from existing credit cards, you can also use these offers to do balance transfers from other higher rate debts or bills as well including personal loans, car loans, or home utility bills. Often the balance transfers come in the form of “transfer checks” which allow you to write a check to transfer the balance making it much more convenient for consumers.
* Credit card services *
Credit card merchants will typically offer bundled services tailored for a particular consumer. For example they may offer a “Miles Rewards” card that feature flier miles for frequent travelers. Or “Points Rewards” cards that offer points or cash back for every purchase made with the card tailored for frequent shoppers who like the idea of getting an automatic discount on everything they buy.
Other services often offered in addition to rewards back include any or all of the following:
– Additional points or cash back for shopping at select retailers or gas stations.
– Travel and Emergency Assistance
– Auto Rental Collision Damage Waiver
– Warranty management for all registered purchases
– Travel accident insurance
– Zero Liability for stolen cards
– Hotel discounts
– Dining discounts
* Merchant credit cards *
Each credit card company usually offers another select category of credit cards called Business or Merchant credit cards. On the surface these don’t appear very different than most other credit cards. They commonly feature the same rates and introductory offers as private credit cards. However the cardholder benefits for businesses and merchants are typically much more comprehensive benefits tailored for business needs. In addition to all of the benefits above, additionally offered are:
– Free year-end summary of expenses by tax category.
– Free additional cards for employees
– Merchant dedicated customer support
* Fixed-rate credit cards *
Fixed rate cards will allow you to transfer balances over from higher rate cards to a permanent fixed rate card. These are usually the best bargain for anyone carrying high balance, high interest credit card debt. However it’s also important to read the fine print regarding transfer fees. Almost all cards charge an average of 3% on the total balance transferred. However while some cards have no maximum on the fee. This means that if you are transferring $14,000 of debt, a 3% transfer fee with no maximum will cost you a whopping $420. However other cards offer a cap at $99 and for high balance transfers, these offers are usually the best deal.
* Credit card merchants *
There are a variety of credit card merchants to choose from, including Capital One, Chase, Discover, Advanta, Citbank, American Express, and others. They all are very similar in terms of member benefits and cardholder terms. However they also vary substantially when it comes to customer service and specific interest-rate terms, such as grace-period for late payments, that could save the cardholder substantially if they do their research on each one before choosing a particular merchant.
* Low-rate credit cards *
Low rate credit cards will typically offer consumers an opportunity to transfer a balance to a card with an interest rate ranging from 0% to 4.9%. Low rate cards also charge the 3% fee as the fixed-rate ones due, however the major difference is that these terms are not fixed. After a set period, ranging from six months to a year, the rate will then revert to the rate for purchases, which follows the prime rate, and is usually fairly high.
* Merchant account services *
Most credit card companies provide debit and credit card processing for businesses so that a small or large business can accept credit card payments from consumers. Account services provided by credit or financial institutions varies in terms of whether they charge the business for equipment and setup and the pricing structure (fees that are charged for each transaction and yearly or monthly fees). Merchant services include different types of processing solutions depending on the type of market that the business is catering to. These include in-person sales such as retail stores, online sales such as web stores or web hosting companies, or phone or mail order processing such as catalog businesses.