THE INS AND OUTS OF CREDIT SERVICES
The world of credit cards can be very confusing for the general consumer and business owner. This article will take the mystery out of credit services, including business credit accounts, merchant services, and it will provide a few additional tips to save time applying for credit cards.
* Business credit cards *
Each credit card company usually offers another select category of credit cards called Business credit cards. These differ from typical credit cards only in that they offer additional benefits tailored to business needs. These include:
– Free year-end summary of expenses by tax category.
– Free additional cards for employees
– Merchant dedicated customer support
* Accept credit cards online *
In order for businesses to capture sales on the growing internet market, online processing of credit card purchases is essential. Even most large retailers such as Wal-Mart offer a fully functioning online storefront. Online payments are accepted through a payment gateway, which is an encrypted system that transmits authorizations over the internet. These gateways are typically linked to a retailer’s online “shopping cart” system, an order page, or a virtual terminal (where the retailer enters the credit card information). All orders are processed through the encrypted system and funds are deposited, typically within 48 hours and after fees are deducted, into a business checking account.
* Merchant credit accounts *
A business credit account, or “Line of Credit”, is an unsecured credit line with the credit card company, usually ranging from $5000 up to $50,000. These are lines of credit that require no collateral and are usually structured in much the same way as a typical personal loan with a competitive annual percentage rate. Merchant credit accounts provide businesses with the flexibility to expand, or to invest in business growth opportunities quickly.
* Small business credit cards *
Small businesses usually don’t require the financial services of larger corporations, so credit card companies have customized the personal credit card business with additional benefits for small businesses such as a year-end tax summary and a limited number of free additional cards for employees. These small business credit cards allow small businesses the flexibility of an immediately available credit line for purchases, as well as automated tracking of all of their business expenses.
* Credit card applications *
Applying for a credit card can be done either on the phone or over the internet. Applications will usually take only a few minutes to complete, and many times approval is instant. At the time of applying, consumers have the option to transfer balances from higher rate cards, assuming the approved credit limit is high enough. Cards usually arrive in the mail within 4 to 7 business days.
* No annual fee credit cards *
Annual fees are charges that are applied to consumers for the privilege of having a line of credit. Most credit card companies only offer no annual fee credit cards, however there are a few that offer very low, fixed interest rates that have an annual fee. This option may be more beneficial to cardholders that carry a very high balance on their cards. The savings in interest would easily offset the annual fee.
* Low-interest credit cards *
Low interest credit cards are usually from an introductory offer that is short-term, after which the rate jumps to follow the prime rate, and is usually quite high. However for consumers with excellent credit, credit card companies will often offer a very low-interest credit card at a fixed rate. This usually ranges between 6.9% to 10% and will remain in effect on the credit card permanently unless a late payment is made to the card or the consumer’s credit rating drops significantly.
* Instant-approval credit cards *
Usually all credit card companies offer instant approval either over the phone or over the internet. Due to the latest in internet technology, credit card processing systems can now automatically obtain your credit score. This allows credit card companies the ability to tell you instantly, either over the phone or on the internet, whether or not you qualify for the credit card you’ve applied for.
* Credit card merchant services *
Most credit card companies provide debit and credit card processing for businesses so that either small or large businesses can accept credit card payments from consumers. Account services provided by credit or financial institutions vary 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 a number of processing solutions depending on the type of market 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.
* Apply for a credit card *
If you are planning to apply for a credit card, the process will move much more quickly if you’ve gathered all of the relevant information together beforehand. Standard information that is usually always asked for on a credit card application is the following:
– Name, address, and phone number
– Housing status (rent or own) and how long at current residence.
– Employer name, phone number (and sometimes address)
– Your occupation and total household income.
– Name and account numbers of any credit cards you want to transfer balances from.
While the world of credit services can appear to be very complicated at times, it really isn’t for the consumer who takes time to carefully read the terms and conditions of every credit application. The key is to focus on the annual percentage rate and all fees that are applied to the account. Used appropriately credit cards can provide an important level of financial comfort, leverage, and flexibility to every household or business financial plan.