Credit Archives - GUJRAT INDIA

Choosemyrewards: The New Chase Credit Card Rewards Management Tool

In previous articles, I have discussed travel, cashback, interest-savings, and merchandise rewards programs. These rewards specific cards are geared towards people who are grounded in which type of rewards they would like to earn.

For those who are indecisive or those having different rewards interests at different times of the year, should take an interest in the Chase choosemyrewards program. There are two different flagship cards involved in this program, the Chase Cash Plus Rewards Visa and the Chase Flexible Rewards Visa. Both cards offer 0% APR’s for 1 year, and low APR’s thereafter. Statistics show however, that the approval rate for the Chase Cash Plus Rewards Visa is higher.

Let’s take a minute to explain the choosemyrewards program. Like any other rewards program, there is a point system for both cards. You receive one point for every dollar spent on purchases with each card. When these points are accumulated, you then have the option of redeeming them for a variety of goods or cash. Here is what distinguishes these two cards from all other programs. At any time, you may login to the choosemyrewards page on the Chase server to elect which type of rewards you would like to receive. Choices include merchandise, restaurant gift certificates, retail gift certificates, travel rewards, and with the Chase Cash Plus Rewards Visa up to 5% cashback on purchases.

Many other rewards programs make it very difficult for the consumer to redeem rewards, let alone choose them. Typically, you would have to call up the company, wait on hold to get in touch with the proper customer service representitive, and then listen to them give you your list of options before ultimately processing your decision. With the choosemyrewards program this is not the case. In the mail with your new Chase card, you will receive a login pin number and the web address where you may access your rewards account. After entering your pin number, you may view your points accrued and a list of all rewards options. You may then scroll through the list of options and choose the rewards you would like to receive.

It only gets better. Let’s say you logout of your account after you choose your rewards and realize that maybe you didn’t really want that gift certificate to Home Depot that you signed up for. Instead you’d like a gift certificate to your favorite restaurant. All you have to do is simply log back in and switch your reward redemption. This is a very simple and painless process and gives you, the consumer much more control.

Many people save their points until the end of the year, because they never expire, and redeem their points to give gift certificates as holiday presents. Others take a trip to a warm place during the winter. Others just simply trump in on a cashback award in the form of a check. Whatever your interest are, or if they change, enrolling in the choosemyrewards program will make your rewards management more user-friendly and thus, much easier.

Indian Credit Card Industry – On the Path of Unbound Growth

Soon you won’t have to carry your plastic money for your payment purposes as your mobile number will act as the credit card number. Recently, Reserve Bank of India (RBI) in its annual policy statement informed that it was in the process of formulating the guidelines for a payment system using mobile phones. RBI is discussing with both public and private sector Banks, service providers and industry bodies to develop the payment system. RBI said the draft guidelines would be placed on its official website by June 15, 2008.

In India the usage of mobile is growing rapidly. There are about 250 million mobile phone connections in the country, whereas credit card holders are far lower as compared to number of mobile phone users. Hence, mobile for payments is being considered for quite some time as a progressive step forward.

As reported by The Times of India, RBI said in the policy statement “The rapid expansion of this mode of communication and transaction have thrown up a new delivery channel for banks.” RBI further states, “This channel will definitely facilitate small value payments to merchants, utility service providers and the likes and money transferred at a low cost.”

The credit card market is going to witness some more progressive changes in this year. A joint venture between Life Insurance Corporation of India (LIC) and GE Money is likely to launch its first product by the end of 2008. As reported by Business Standard, the venture is now on cards. But we have sorted out those issues (conflict of interest). Currently, we are looking at human resources-related issues. The two financial giants are planning to launch the card by the end of the calendar year.

Once the credit card is launched it would be offered only to LIC customers and policy holders in the first year. GE Money has a 30 per cent stake in the card venture, while LIC Housing Finance Company, LIC Mutual Fund and Corporation Bank have 5 per cent each in this venture. LIC will have 40 per cent in the company, which is capitalized at near about Rs.150 crore. LIC is yet to take a decision about the remaining 15 per cent stake of the total investment. In another positive development, ABN AMRO with India’s travel portal MakeMyTrip.com launched a distinctive co-branded credit card, ‘Go Card’ recently. The card offers special reward benefits and good range of travel-related promotions and packages.

Great News, Business Credit Has No Impact on the Business Owner’s Personal Credit

When done properly, business credit is obtained without the SSN being supplied on the application.

This means there is no credit check from the business owner to get approved. This also means that anyone who has bad, even horrible personal credit can still be approved for business credit.

Reports to the business credit reporting agencies, not the consumer reporting agencies.

So as it has no adverse impact on the owner’s consumer credit because it’s not reported to consumer agencies.

This means utilizing the account, even over 30%, won’t have any adverse impact on the personal scores.

And there are no inquires on the personal credit when you apply for business credit as long as you don’t supply your SSN.

30% of your total consumer score is based on utilization, so if you use your personal cards for your business and if you use those cards you will lower your scores. Using more than 30% of your limit WILL result in a score decrease

So if your limit is $1,000, having a balance above $300 lowers your scores. This means 40% of your total score is damaged. With true business credit, 0% of your score is affected.

10% of your total consumer score is based on inquiries, so if you are using your personal credit to apply for business loans and credit, your scores will go down as a result of those inquiries.

Plus, those inquiries can remain on your for an extended period of time affecting your ability to borrow more money.

And some unsecured business lending sources won’t even lend you money if you have two inquiries or more on your personal credit reports within six months.

The credit doesn’t report to the consumer agencies, so neither inquiries nor utilization have any effect on your consumer scores.

How to Devalue Your Business

Anyone who has sold or bought a business will tell you of the importance.

All potential buyers can easily obtain extensive information about your business, just by obtaining your business credit report… that anyone who wants it can get.

This means they’ll quickly know details about your business including:

• Credit scores

• High credit limits

• Past payment performance

• Employees

• Revenues

And much more…

Now that you know how easy extensive credit and financial information is to get for a company, if you were a buyer wouldn’t you get it?

Based on what’s on your business credit report, would you want to buy your company?

Does your report reflect that your company is “established”, does it show that you pay your bills, do you look like a successful company from your report?

If you could choose from two companies to buy that were the same in every way except business credit, which one would you buy…

… The one with a very limited or no credit profile… or one with a credit profile that reflects good payment performance, and one with available credit.

Business Credit Cards: Give Your Business The Advantage It Needs

There are a lot of business owners who want to accelerate the growth of their business, but it’s usually dependent upon having a little bit more ready money. With this, they would be able to advertise more, replace old or buy new equipment, increase their inventory in order to sell more items, etc.

Some business owners take matters into their own hands by funding these expenses from their personal stash. However, using personal credit cards for business ventures is a risky-business since you assume total liability. If your company, God forbid, is ever sued or goes under, you risk losing your personal possessions and the good credit rating that took you years to build.

Now what if there was a way to free up some of that needed money you are currently using to support your business, by matching some of your expenses with items your business is already buying on a regular basis? Well, there is and it is in the form of business credit cards.

In other words, if you dish out $500 cash each week on realty supplies to make repairs on your properties, but now instead you make those same purchases using business credit cards for just one month, that would temporarily free up $2000 cash from your usual operating budget.

Of course, you are responsible to pay the balances on any business credit cards you receive, but that would be over a period of time giving you enough occasion to make a profit from the $2000 utilized on the business credit cards before the first payment is due. Are you seeing how having business credit is to your advantage? Let’s go a little further.

Business credit cards are a pretty darn quick way to get resources for short-term needs and at the same time they can increase your business’s purchasing power. But it has to be used economically and not to go all out on spending sprees just because it is available.

Other advantages include:

• Business owners with a limited credit file or credit history can apply without providing the stringent requirements of traditional banks.

• It is much easier to make purchases online and make cash withdrawals from these credit lines.

• Bookkeeping becomes simplified with the use of monthly statements and year-end statements to track expenses and pay taxes.

• Unlike installment loans, business credit cards offer discounts and rewards that can be used toward air travel and the like.

• Business credit builds credit. By paying on time and paying more than the monthly minimum fee, incentivizes lenders to increase credit limits and lower interest rates.

Like with all credit, business credit does have certain qualifications for approval:

• 720 credit score

• No bankruptcies

• No foreclosures

• No late payments in the past 24 months

• Possession of a credit card with a $5k limit.

Building a good strong business credit report allows you to stop relying on your personal credit to support your business endeavors. It also helps you to qualify for future financing your company may need from traditional lenders.

The Dun and Bradstreet Paydex Business Credit Score

The main credit score used in the business world is known as a Paydex score provided by Dun and Bradstreet.

This number assess a business’s lending risk much the same as a consumer credit score reflects a consumer’s individual credit risk.

Paydex is essentially the business equivalent of your personal credit score.

The exact definition from Dunn & Bradstreet, or D&B is: The D&B PAYDEX® Score is D&B’s unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors.

There are many BIG differences from a business Paydex score and an individual FICO consumer score.

Consumer FICO credit scores range from 350-850. The Paydex Score ranges from 0-100 with 100 being the highest score you can obtain.

Individual credit scores are calculated based on a number of factors.

The Paydex score is calculated based on only one single factor; whether a business makes prompt payments to its suppliers and creditors within the agreed upon terms of payment.

Most lenders and suppliers are looking for a score of 70 and higher. Having a score of 80 and above is very good.

Here is a breakdown of how the Paydex business score is calculated:

Payment Expectation

100 Expect payment may come early

90 Payments generally come within early

payment discount period

80 Payment is prompt

70 Payment comes 14 days beyond terms

60 Payment comes 21 days beyond terms

50 Payment comes 30 days beyond terms

40 Payment comes 60 days beyond terms

30 Payment comes 90 days beyond terms

20 Payment comes 120 days beyond terms

UN Unavailable

If you own a business, your Paydex score is essential in establishing new credit and continuing to build credit limits exceeding $100,000.

It only takes 60 days to establish a positive Paydex score. To start you will first want to apply for a

DUNS Number, a nine digit business identifying number, with Dun and Bradstreet.

The DUNS Number helps potential customers, lenders, and suppliers evaluate your business’s credit worthiness.

Once your DUNS number is established you will next want to find a merchant who will extend you credit and then report that credit to Dun and Bradstreet.

Once you have positive business credit report to Dun and Bradstreet you will have a positive Paydex score established.

You will want to then apply for more business credit and use it regularly. Make sure you pay all payments back early to raise your scores to 80 or higher.

You can easily and quickly establish a positive Paydex credit score.

As you continue to pay your bills timely your scores will continue to raise giving you the ability to qualify for credit in your business name.

Credit Card Processing For Your Online Business

In the present harsh economic times, many people are gearing towards starting online businesses. Why? Not only do they save up on space payments but also considerably cut on start-up costs. You also save up on insurance and utility costs. Many business owners are incorporating this idea into their systems, and after some period of time, they intend to be entirely online based. If you set up an online based business-be it large-scale or small-scale, most of your services payments will be through cards. If you do not accommodate or accept card transactions, then you will lose an immense number of sales. What most clients look for is the plastic money service, and if you do not accommodate or accept them, they move to another website which will accept their mode of payment. A recent study showed that those online businesses that accept credit card payments have sales up to 400% higher than the ones which don’t.

The easy way in which you can set up your business to accept card payment is amazing. For the set up, you have two alternatives. You could apply for the traditional merchant account at a bank. With this choice, you will have to pay the set up fees and an extra charge every month. The other option is to look for a card processing company online, which provide you with credit card services, without charging any set up fees. For a small business or if you are just establishing or starting an online business, you have to check and find a reliable card processing service provider. At first, you will not be able to foresee how many transactions you will undertake per month. Therefore, avert going for the lower transaction fee-higher monthly payment. Until you are certain of the number of transactions in a month, you should go for the higher transaction-lower monthly pay fee. With the latter option, you will pay for each transaction and about $10 per month.

Thorough research and scrutiny of the online card processing providers will ensure that you sign up with the right company. You should be attentive to any company that offers bonuses and extra applications. You should choose a company that will be able to alert you, through your phone or mail, of any credit card payments and transactions. It will cost you considerably less if you accept $70 credit card payment than creating, printing and mailing an invoice to the client. Whether you are starting a small online business or extending your already successful business, accepting card payment will substantially decrease debts. This will increase the overall cash flow hence increasing profits for the business. Constantly making high profits will ensure the prosperity of your business.

All in all, you should be familiar with the overall credit card processing procedure. It is essential to know what your business needs or requires and how you can make it happen. Don’t lag behind because it will undoubtedly cost you a great deal and to some extent, even your business. Credit card processing is crucial, and it will lift your business to greater heights than it has ever reached.