TeleStraining – Financial Articles

Credit card processing companies are such organizations that set up credit card processing for a business or a merchant. They are generally financial institutions that can accept credit card payments. For new business owners, approaching a large bank might not be such a good idea, as their criteria for approval would involve a large volume of average monthly sales.

Credit card processing companies use the principal of two-way access to the merchant’s bank account. This means they can deposit, as well as withdraw money in case of charge backs to the account. Every time a transaction is made by a customer on the merchant’s website, the merchant account provider will charge a processing fee. It is generally between 2.5 and 5 percent while for special kind of cards, a higher charge may be applied.

To enable credit card processing along with setting up a merchant account, a security deposit may be called for, which is refundable in most cases. There are many websites available that help businesses choose the best merchant account provider for their needs. Some companies charge a set up fee where as some do not. A monthly or yearly charge is also applicable to pay for services such as customer service, monthly statements and maintenance of the account. This will depend on the agreement between the business and the credit card processing company.

All credit card processing companies have their own websites. This enables any business to apply online for credit card processing service. These websites are very user friendly and declare the status of the application within twenty-four business hours.

It is a good idea to get estimates from different companies and compare the services provided by them and the fee charged for those services. There are many websites available that help businesses compare and choose the best merchant account for their needs. These charges from merchant account providers must also be compared with those of the business’s bank for more options.

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Without a doubt, American Express is the most prestigious issuer of credit cards in the world. Not only are the well known for their stellar customer service, but also their generous reward programs and spending limits. However, along with the positives come a number of negatives. Let’s take a look at both, courtesy of CreditCardForum.com:

The Pros:

No Preset Spending Limit: The American Express Gold Card, Platinum Card, Centurion and some others come with no preset spending limit. This doesn’t mean you can spend whatever you want, but it does mean you have flexibility in your buying power.

Excellent Customer Service: Cardholders rarely have to wait on hold to speak to a representative. American Express and Discover have been ranked by J.D. Power & Associates for having the best customer service in the credit card industry.

Lucrative Rewards: There are a variety of reward programs offered. For example, upon reviewing the American Express Gold Card application, you will notice it is part of the “Membership Rewards” program; points are earned for every purchase and they can be redeemed for almost anything, from gift cards to merchandise. Meanwhile, others like the Simply Cash card just give straight cash back instead of points.

Travel Benefits: AmEx cards are famous for their extensive travel benefits. For example, upon reviewing this American Express Blue Sky review, you will see that there are quite a few perks to make your trip easier. Benefits include free rental car insurance, travel accident insurance, hotel discounts, and more.

The Cons:

Stricter Requirements: One of the biggest drawbacks of AmEx cards is that you need an exceptional credit rating just to get approved. Not only is this true for the higher level Gold and Platinum cards, but also the entry level Blue Cash and Blue Sky cards. Furthermore, even if you have a great credit rating, many cardholders complain that their credit limit isn’t what they expected it to be.

Less Benefits Than Before: The Platinum Card used to give free companion airfare four times per year to cardmembers, however a couple years ago they got rid of that benefit. The cashback on gas with the Simply Cash card has also been scaled back. Many cardmembers are disappointed to see their benefits dwindle away.

High Annual Fees: For most people, the annual fees simply don’t make sense. For example, the Platinum Card carries a $450 annual fee, which is hard to justify considering the benefits. However not all of their cards have an annual fee.

Because many people started using credit cards as standard mode payment as opposed of the conventional cash or cheque options, credit card companies are competing each other to achieve significant profit margin of this sector of money sector. At same time in past, some people have to deposit hefty amount to get a credit card, the annual one for making use of it, and then of course the huge interest which had to be returned in case of late payments. in current days most of these have been removed as credit card banks relax to acquire and withhold their clients. One of the major features stressing these modifications is the appearance of the reward credit cards in the market. Receiving rewards from credit cards has turned out to be the custom of the day as almost 60 cash back on purchases but this increases till 5% depending upon scheme to scheme. The cash back is usually settled at the end of the year in the form of a cheque. This is one among the most preferred ways of getting incentives from credit cards.

Reward plans: The buyer can build up points based on credit card usage. The more the spending, the more the points that can be accumulated and then used for earning incentives from the credit cards. Most companies offer rewards in the form of exchangeable gift or reduction vouchers of some stores, fun vouchers for food or movies or free or discounted gasoline at picked stations. Earning rewards from credit cards have been the most common rewards plan.

Flyer miles plans: receiving flyer miles is one more way of earning incentives from credit cards. These schemes let the user accumulate flyer miles that become redeemable for air tickets once a certain number of points flyer miles are accumulated. Flyer miles are rewarded based on the money spent using the credit card on sometime. This is the good credit card incentive for corporate men who need to travel frequently, because it is only large spenders who can accumulate ample points to receive any significant flyer miles.

While receiving incentives from credit cards seems very alluring at first, few points do need to be remembered for receiving the good return out of credit card incentives. In first place be sure that the card does not contain an yearly fee. Further, earning rewards from credit cards are profitable only for consumers who don’t allow any interest charge mount up on their cards by making payment their monthly balance on time since interest charges on these cards are higher than normal.

Certainly, you shall now get your credit statement without paying a dime. And unlike before, now it’s totally free. No longer do you have to register for a “free” credit report by registering for “credit monitoring protection service” for a low yearly fee of $79 a year! The days of dodging the painful costs and service charges for a free credit report are over.

As covered in the 2003 Fair and Accurate Credit Transactions Act, you have the power to ask for a free copy of your credit report within a 12 month duration from the huge three credit statement bureaus (Experian, Equifax and TransUnion).

The aim of this new government act is to make sure that Americans have the right to be updated about what these three credit informing agencies tell about you not having to spend for it. Because identity theft, cheat and mistakes are very common these days, why should you have to spend for a copy of a statement to argue back against these troubles?

Some of the 3 ways to obtain your free annual credit statement:

The three credit reporting agencies have designed a website to request your yearly credit statement.

1) Go to www.annualcreditreport.com

2) Call (877) 322-8228 to request your free credit report.

3) Fill an application from the Federal Trade Comission, send it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

If you go straightly to the three agencies or use any other kind of service you may have to spend or register for the subscription services I specified above! ensure that you use any of the 3 methods I’ve listed to obtain your annual free credit statement.

You can obtain the reports from all 3 departments together or stagger the reports from every during the course of 1 year. The benefit of staggering the reports that you obtain is to keep record of how any critical modifications in your financial picture influence what is on your credit statement. For instance, if you plan on taking a second mortgage over the coming year, or applying for student loans, ect. it might be wise to obtain a statement prior and later these major events!

This new Act doesn’t supplant the other modes you can take advantage of to get a free credit report. In case you are applying for unemployment or been rejected a loan, or require a credit report in order to obtain a career, you still have the privilege to obtain a free credit statement.

Take benefit of this new government regulation and ensure all of the information given by all three credit providing agencies are correct. Any errors or omissions can reduce your credit score and end up costing you a huge amount of money when you apply for any sort of credit.