The new laws and regulations that govern consumer credit cards will also affect business credit cards. These changes have to do with credit card interest rates, fees and credit terms offered on business credit cards. These changes started to take effect in 2009, but they will be fully in place by August 2010. These changes have come about because of a federal credit card law.
The regulations aren’t just for new credit cards. These changes will also impact the credit cards you already have. It’s important that you understand what the changes mean to your business. Below you will find highlights of some of the changes and how this might change your business credit card.
Billing Changes
One of the biggest changes is that the card issuers now has to give your business “a reasonable amount of time” to pay the credit card bill. They are required to send the bill out with a bill due date that is 21 days after bill delivery. This change came about because some credit card due dates were so close to delivery date that it was impossible to pay the bill before late charges could be assessed.
The new law also limits payment cut-off times. Instead of setting an arbitrary deadline for the payment to be due, the new law sets the cut-off time after 5pm on the due date. The issuer can’t start assessing late fees until the next time they are open for business, so if the date and time falls on a weekend, holiday or anytime the card issuer is closed for business there can be no late fee assessed.
Minimum Payment Consequences
Another change to the billing is that the credit card issuer has to include on the monthly billing what the consequences are if you make only the minimum monthly payment on the account. This means you will know how long it will take you to pay off your entire balance if you only make a minimum payment.
The second piece of information that they now have to include on the statement – is how much the payment would need to be each month if you wanted to pay the entire balance off within three years. The statements will also include the total amount of interest you will pay if you pay the bill off with minimum payments.
Notification of Interest Rate or Fee Changes
One of the major changes under the new law is that credit card issuers can only raise their interest rates annually, or under limited conditions. These conditions include the end of a promotional period, or if there is a variable rate stated for the card, or if the business makes one or more late payments.
Otherwise the interest rates can only go up after the first year. The other change is that if the company is going to raise your interest rate or other terms, the card issuer must now notify you in writing with at least 45 days advance notice of those changes. This time frame is supposed to give the cardholder plenty of time to shop for a new card if they don’t like the new rates.
Opt Out Rights
Once the credit card issuer notifies you of a change, you now have the option to “opt out” of the card. If the changes the card company wants to make are unacceptable to you, then you can reject them. This means you agree to close your account and not make any new charges. Then you will be allowed to pay off the remaining balance on the card under the old terms of the agreement. By law you be allowed at least five years to pay off your balance, but you have to make the minimum payment due under the old agreement.
Summary
The above represents only a few of the changes to business credit card regulations. Make sure you read up on the changes and understand what your new rights and obligations are. Credit card issuers will be changing their card terms to meet these new regulations so be sure and read any communications that concern credit cards you currently have.
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A Business Credit Card can be used by any size business. The credit card will enable the company to purchase goods and services on credit, with the promise to pay at a later date. The issuer of the Business credit card can be a bank or other financial institution, or the cards can be issued by the office supply store, other retail outlets or service company for their specific products. The card issuer sets a specific limit that basically assigns a line of credit to the card holder.
Business Credit Card versus Charge Card
Credit cards are different from charge cards. But sometimes the terms are intertwined and used to describe either one. A charge card will require you to pay off the total balance on the card at the end of the month. They normally don’t have a preset spending limit, but remember, the TOTAL balance must be paid in full each month. An example of this would be the traditional American Express Business Cards or the new JP Morgan Chase INK cards.
A true credit card will allow the business to carry forward a balance and pay anywhere from the minimum monthly payment, to the months entire balance. With a credit card, interest accrues each month on the balance left over after a payment is made.
Business Line of Credit versus Credit Cards
A business line of credit is a loan that businesses can utilize when they need to. A line of credit generally has a smaller interest rate than a credit card. But in the current financial climate, these lines of credit are harder to get. They often require you to present a business plan; work directly with the business lending area of the financial institute, and getting approval or hearing back from these institutions on your request can often take several weeks. Business Credit Card lending is typically easier to arrange. Often applications can be handled online and approval generated within minutes. Once you are approved, you generally receive your business credit card within just a few days.
Getting a Business Credit Card
For smaller businesses that don’t have their own credit history, the approval of the business credit card will often be based on the owner’s personal credit history. It is important that you make sure your credit report is as clean as it can be by getting the reports annually and looking at them to ensure the information is correct. You can do this free through any number of online sites; one popular site for this is www.annualcreditreport.com.
Benefits of a Business Card
There can be many reasons and benefits to utilize a Business Credit Card. One of the main benefits is to separate your business expenses from your personal ones. Especially if you are a small business owner who often uses their personal credit card and then has to go back and separate what was for the business and what was personal at tax time. A business credit card can save you time and confusion.
Especially since the business credit card issuer provides more detailed reports for your purchases. These itemized reports often categorize your expenses and provide a year-end summary that is perfect for reporting tax deductions. These reports can be beneficial not only at tax time, but for monthly bookkeeping tasks.
Having a business credit card helps you build credit for your business. This may help in the long run when you need to apply for larger financial assistance or loans to expand your business. Additionally, if you have employees you can distribute supplementary cards on the account if needed and utilize the cards to keep track of an employee’s spending.
Incentives and Awards
Many business credit cards have very attractive awards programs that are exclusive to business owners. From 3% cash back on all purchases to awards that will allow you to travel or pay part of your credit card bill, it is worth understanding what the differences are for the programs.
Credit Cards Differ
Don’t forget to compare all the charges and fees for a specific card. Some card issuers have multiple flavors of business credit cards and all the rates and fees differ even for the same company. Some cards have an annual fee, some don’t. The interest rates, late fees, and other charges vary greatly not only from company to company, but between cards within the same financial institution.
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Gift cards are a very popular way to give a gift to someone. You don’t have to worry about size, color, or individual taste. In this case, one size fits all, as long as you pick a store or restaurant that the recipient likes.
However there are a few things you need to think about or decide on before you purchase a card. The following are some of the most asked questions concerning gift card purchasing.
What value do gift cards come in?
The answer to that question depends on where you buy the card. Some merchants set a beginning price of $25.00, with the ability to go higher than that in nearly any increment. Some businesses might have a lower minimum and some more expensive establishments might even have a higher minimum. It’s something you will need to ask before you buy. I received a $5 gift card from Starbucks at Christmas that was just the right amount for one coffee drink.
How long is the gift card valid?
This too depends on the place the card is bought. Some businesses have a one year limit, with others having a five year limit. One thing you can be sure of, there will be a limit. Quite a few of the cards will have a decreasing value starting with several months after purchase. A gift card should really be redeemed as quickly as possible after receiving it to get the full benefit of the card.
In the US there are new Federal Regulations on gift cards that will go into place on August 2010. This new law insures that the card must not expire for five years and that no fees can be assessed if the card is used within the first 12 months. If you have gift cards that were issued before August 2010, use them. There are some gift cards that may become null and void when the new regulations go into effect.
Can I get my money back if the card is lost or stolen?
The answer to that question is usually a definite NO. Gift cards are normally cash cards not registered to a specific name but to a card ID number. Anyone can use them. You need to think of a gift card as though it were cash in hand. If you lose cash, you’ve just lost it-no one pays you anything for it. The same is true with a gift card. By the same token, if you find one that still has a balance on it you might as well use it because there isn’t any way to trace it back to a specific person.
How do I check my balance?
This is fairly easy as most cards can be read by a cashier. If the card is for a specific business you would need to check with a cashier in that particular store or a branch of that business. If it is a gift card that can be used anywhere any cashier should be able to scan it and tell you the balance. Sometimes there is a number or website on the back of the card where you can call or go online to check balances.
Does all the card value have to be used at once?
That answer is a general no. But it might depend on the amount that is left on the card. If the balance left is only a few dollars, by the time you get around to using it again the few dollars may have decreased to a few cents or nothing at all because of “no-use” fees or other charges.
In most states in the United States the establishment issuing the card can make up their own rules and regulations. They can even change those rules after you’ve bought the card and not bother to tell you of those changes. They can charge an interest on the card and deduct that interest when the card is used. And as explained above, the card can have an expiration date even if that wasn’t specified when the card was purchased.
Some of these business practices will be managed by the new federal government regulations, but not all of them. If you are spending very much money-or any money- on a gift card you really need to get some written commitments concerning the card.
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The gift of a gift card can be a fun and even exciting gift to receive. To make sure the gift card you give is appreciated, here are a few tips to help you accomplish just that. Gift cards, like any gift, can be thoughtless and a careless giving, or it can be very thoughtful and a truly personalized gift.
Tip One – Customize Giving
First, as when giving any gift, you need to think about what the person receiving the gift card likes to do. What does the receiver like in the way of entertainment, where do they like to eat, or where do they like to shop? Gift cards can mean a trip to a museum or to the movies. They can provide a meal at a favorite restaurant or offer a new dining experience.
Gift cards can offer so many ways to express your good wishes for a friend or family member. A well thought out gift card can be easy when it is for a person that you know well. If you know what they like to do, where their favorite restaurant is, what they might like to try sometime, a gift card is an easy choice. On the other hand, a gift card that offers someone a new adventure, or gives them the chance to go to dinner or movie when they otherwise couldn’t squeeze that into their budget can be the perfect gift.
Tip Two – Specific Stores
However, sometimes you might just want to give someone a gift that may help with their grocery budget. In this case, make sure the card is to a store where they like to shop. If they hate the meat, or the produce at a certain store they might not even use the card. You also need to make sure that any gift card to a clothing store or specialty store is one they will use.
Tip Three – Online
Something to keep in mind is not all gift cards will allow you to shop online. Even specific shops who have online shopping, may not allow you to use the gift card for online purchases. So if the receiver does a lot of online shopping, make sure you know if the card can be used online or let the person know it is for the store only.
If you purchase a gift card online, be doubly sure of the rules that govern that card. Know the expiration dates and any charges – like if the card has “no-use” fees and isn’t used in a timely manner. Also, can the gift card you bought online be used in the local store?
Tip Four
There are those situations where you want to give something to someone you really don’t know. Like if you plan to purchase a gift card for an employee or colleague. In that case there are gift cards that can be used anywhere or at several different businesses. Banks and credit card companies offer gift cards that can be used anywhere. You do have to be careful because they will sometimes charge you a fee to purchase the gift card and there may also be fees taken off the balance of the card when it is used. These cards normally have an expiration date and may have money deducted monthly when not used.
The gift cards offered by a mall or a company owning several different restaurants or businesses can be a good choice for giving to those you don’t know well. These types of cards will sometimes have promotions where if you spend $25 you get $30 on the card.
Tip Five
With any gift card, you need to know and understand the rules and regulations governing this specific card. Until August 2010 there haven’t been any federal laws that regulate gift cards in the US. Each different card issuer has set their fees, charges, and expiration dates.
The new federal law will mandate that all gift cards have a life of five years. It also states that there can be no fees assessed on the card balance if the card is used within the first 12 months. This doesn’t mean they can’t charge a fee when you buy the card, just that no fees can be taken off the card for the first year. If you have gift cards that were issued before August 2010, use it. There are some that may become null and void when the new regulations go into effect.
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The most popular thing to give as a gift is, believe it or not, a gift card. They’ve become so popular because of the convenience. After all, you don’t have to worry about sizes or colors or how much it will cost to send it.
For most people the cards are a joy to receive. They get to pick their choice of what they want. That is if they remember to use it! A large number of cards are never used. People forget they have them or they don’t have them with them when they are ready to buy.
One thing to remember when you receive a gift card, use it right away while you have it in your mind and hopefully in your wallet. Cards do expire and some have fees if they are not used in a timely manner.
News – New Law
There is a new law in the US that comes into effect in August 2010 that gives all gift cards a life of five years. This new law insures that no fees can be assessed if the card is used within the first 12 months. If you have gift cards that were issued before August 2010, use it. There are some that may become null and void when the new regulations go into effect.
Information – Sell the Gift Card
Now if you simply hate gift cards and don’t want to be bothered using them, you can sell them. Of course, the card value is discounted when you sell them. This buying and selling of gift cards is a business and the discounted value is how they make money on this service.
The cards must have a minimum value of $25 to be considered for sale, and the price you can get will depend on where the card can be used. For example, a Visa gift card that can be used anywhere that accepts Visa cards will be worth more than a card that can only be used at say, Starbucks.
The amount of the card will also influence the amount of the reseller’s discount. One place to check out reselling gift cards is called Plastic Jungle. You can find this card reseller on the internet at www.PlasticJungle.com. They pay approximately 85% of the gift card’s value.
There are other places on the internet where you can sell your gift cards; search for gift card reseller. You can also buy gift cards at a discount from these resellers. Just be sure and check the expiration date and terms for each card. The advantage of buying from a reseller is that you can save anywhere from 13% to 30% of the card value.
Information – Points And Discounts
There are several places that will give you award points for buying gift cards, and then you can spend those award points to buy merchandise from that business. Amazon.com is one business that does this.
Another popular benefit for buying gift cards is an upfront benefit from some businesses. Many restaurants do this, but the practice is spreading to other businesses as well. This benefit comes when you buy a gift card for a certain amount, but the value of the card will be worth a greater amount. Say you spend $25, but the gift card is actually for $30. Some restaurants will give you the $25 card and an extra $5 card. The marketing behind this is to buy a gift card for a friend, and keep $5 for you to use.
One thing to consider, if these types of bonuses are offered at a place you dine or shop at regularly, buying gift cards to use for yourself might be a way to save money and if you are buying a gift card for someone else, it’s a great way to spend within your budget – but give a more expensive gift.
Information – Treat Them Like Cash
One big thing to remember about gift cards is they should be treated just like cash. If you lose the card or it is stolen, it’s your loss. Also, whether you’re the buyer or the receiver of the gift card, ask about and understand the terms and rules governing the card. Sometimes there will be a website on the card that allows you to look up this information.
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