Posts tagged Credit
Bad Credit Auto Loans Expert Valley Auto Loans Employs Renowned SEO Firm … – DigitalJournal.com (press release)
Bad Credit Auto Loans Expert Valley Auto Loans Employs Renowned SEO Firm …
DigitalJournal.com (press release)
Valley Auto Loans is now making aggressive efforts to build a strong online identity for their much appreciated bad credit auto loans service. In a recent development, the company has recently hired a famous SEO company to look after the planning, …
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The Telegraph reports Google is leading an effort to prevent illegal download sites from having a source of credit to be able to buy ads online. Google is in talks specifically with Visa, Mastercard and PayPal to prevent these types of companies from using credit cards or PayPal accounts. This…
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“Mr. Proffitt, we wanted to inquire about possible fraudulent charges on your account made yesterday…”
And with that, my day went to heck in a hand basket.
It turns out that somehow somebody got a hold of my credit card and managed to rack up some interesting charges at a big-box electronics store a few towns over. The good news is, the fraud division at my bank flagged them and the charges were quickly removed and after filing a police report (a requirement here in Indiana), the matter was closed and I had a new credit card in hand by the end of the week.
That’s when things got interesting.
It turns out that on this card, which I used mostly for personal purchases, there were a number of recurring charges that I’d neglected to check up on over the years, and discovered only after the original card number had been shut down and the vendors came calling for their next monthly payment.
Legal, But Not Good
These are known as “gray charges,” legal but sometimes unexpected or forgotten charges to a credit card that just keep hitting an account indefinitely.
In my case, some of the charges were perfectly fine: Netflix pinged me when because I hadn’t changed my account payment information before the first of the month (I’d forgotten that I’d started Netflix on this card and not my debit card). The New York Times, the same thing.
But I also got requests for payment from things that should have been dropped a long time ago. An annual fee for an aviation website that I’d used when I was actually using my private pilot’s license; a credit reporting service fee that I was reasonably sure I’d cancelled.
One In Four Are Victims
According to transaction monitors BillGuard, I’m not alone. One in four consumers have been tagged with these gray charges, which typically accumulate like barnacles on your account as the years go by. Even diligent-ish bill payers like me may miss them, especially when charges aren’t made on a regular basis.
Getting a new credit card was a pain, but it also prompted me to scrape off those barnacles on my account. Fortunately, there were only these two, which were costing me about $146 annually. I was lucky; BillGuard estimates that the average gray charge victim racks up an average of $356/year in grey charges.
Because the Holidays are an especially good time for these kinds of charges to glom onto your cards, BillGuard has published a useful infographic detailing the problem and ways to look out for charges like this, which often ride the bleeding edge of legality.
Title image courtesy of Shutterstock.
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Local Direct SEO Gives Small Business a Remarketing Boost with Credit
Any business that can master online marketing is set up to enjoy a constant flood of new business. This potential is clearly seen by businesses as recent statistics estimate online marketing spend will reach $34 Billion by 2014. One reason that online …
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Google has extended the AdWords program that offers advertisers a credit card with rates of 8.99 to 18.99 percent. Now, SMBs in the UK are eligible to apply, as long as they’ve received an invitation; more invites are also on the way to U.S. SMBs.
View full post on Search Engine Watch – Latest
At a time when small businesses may have trouble getting access to credit, Google is partnering with banks in the U.S. and U.K. to offer credit cards that can only be used to buy AdWords advertising. The company has been piloting the AdWords Business Credit program since July in the U.S. and says…
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One of the basic tenets of the modern financial system is that it takes money to move money. In its most basic form, that means that when you make a transaction with your debit or credit card, the processing companies, such as MasterCard, Visa or American Express, are taking some of that money for themselves – usually between 1.5% to 3%, depending on the type of transaction. The concept, called interchange, has been a thorn in the side of retailers for decades. One startup that focuses on mobile payments has achieved the dream of eliminating these transaction fees once and for all.
Boston-based LevelUp (created by SCVNGR) focuses on mobile payments for local merchants. LevelUp is an app that can be used to make payments by allowing merchants to scan QR codes tied to customer payment information. Through the app, merchants can offer loyalty programs and deals for customers.
LevelUp’s dream has been to completely eliminate the transaction fee for its clients. Called “interchange zero,” LevelUp has been working toward this goal for more than a year. Today, it finally has succeeded.
“We are planting a major flag by becoming the first payments company that doesn’t charge a processing fee for moving money. Like 0% flat. Forever,” said Seth Priebatsch, founder of SCVNGR/LevelUp.
Eliminating interchange could be one of the most disruptive forces that the financial system has seen in more than a century. As a base concept, interchange zero goes deeper than the evolution of digital payments and plastic credit cards. Those were just mediums to represent money. But transaction fees are a backbone of the ways in which many billion-dollar financial companies do business. As of 2009, transaction fees were a $48 billion boon for the processing companies and a source of stable, unquestioned income.
Adding Value to the Transaction
Priebatsch says he believes that interchange is a valueless service – just a fee to move money from one point to another. It benefits the transaction companies by providing them significant revenue sources that, in turn, keep them in business. But interchange fees don’t help the consumer or the retailer.
LevelUp’s approach is different: It makes money by driving customer acquisition and loyalty to the merchant. When a merchant offers a deal (say, $5 for a first-time purchase), LevelUp makes 35 cents on the dollar for every deal redeemed. It is a form of advertising and marketing that is similar to what many other payment companies offer. Yet, those companies, in addition to making money from the deals, also charge a transaction fee.
“Our campaigns are so value accretive for the business that we’re making more money by providing value than we would by simply charging for the interchange underlying [a transaction]. And the businesses are happy to pay it because, unlike standard payment processing, we actually provide value,” Priebatsch said.
Make no mistake: Somewhere in the system, interchange is still being paid. What LevelUp is essentially doing is subsidizing the cost of the transaction fee for the retailer. LevelUp has built its business to make the amount of interchange as low as possible.
“We do have some interchange costs when a consumer links a card, but that’s not a 100% complete story, as LevelUp has also done some pretty innovative things to actually drop our interchange incredibly low,” Priebatsch said. ”These range from algorithms to more effectively move money, to transaction steering, to special relationships with banks. I can’t talk about all of them, but trust me, I’m paying an interchange rate that would make your jaw drop,”
On the Way Out?
Priebatsch says that, across the financial industry, interchange will trend towards zero for everybody: “It will be too cheap to meter.” Recent federal regulations are also in favor of the approach that LevelUp is taking, with both the Dodd-Frank Act and the Durbin Amendment to that bill taking aim at interchange fees to increase competition among payment processors. The legislation means that it is difficult for the large banks and financial companies to lobby against approaches like the one LevelUp is taking.
LevelUp sees its approach as an opportunity. “Half the companies want to destroy us. The other half want to work with us,” Priebatsch said.
In the end, the move to interchange zero could be a net win for the economy and help usher in a new era of how payments are conducted. Businesses will be able to save valuable percentage points on their bottom line, and digital payments will start being accepted at more locations. It may take a couple of years for real changes to be seen on a large scale, but one startup is putting the pressure on companies thousands of times its size to change the status quo.
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Apple has never been shy about bringing change to complacent industries. Its products have reinvented music distribution, mobile phones and, with its new mapping app, GPS navigation devices in cars. It may be time for a new sector to sound the alarm: Apple appears to be maneuvering itself into position to challenge Visa and Mastercard like no company has before.
The prospect has intrigued analysts for a while. In May, JP Morgan analyst Mark Moskowitz floated the idea of “iPay,” a hypothetical mobile-payment platform that Apple was in position to develop. Although Moskowitz saw no evidence of an iPay platform in the works, he was optimistic that Apple would move in that direction, given that the Apple Store app – which lets shoppers check themselves out of an Apple Store with their iPhones – was a small step in that direction.
This week, Apple took another step toward mobile payments when it introduced its Passbook app for iOS devices at the annual World Wide Developers Conference (the announcement starts about 93 minutes into the keynote address.) Passbook aggregates a variety of commerce-related items such as digital coupons, stored-value cards, loyalty points, movie tickets and boarding passes into an easy-to-navigate app. It doesn’t handle credit card transactions. However, it should be a relatively trivial matter to link Passbook to the iTunes account that every iPhone or iPad owner must set up before downloading music or apps to their Apple devices. (For more on the current state of Passbook, see Don’t Call Apple’s New Passbook Feature an E-Wallet – Yet.)
In the keynote, Apple revealed a statistic that hints at its potential to shake up the consumer-credit industry: The company has 400 million active accounts in iTunes, each with a valid credit card number. Four-hundred million is a substantial number, an installed base that any online-payment system would love to have (hello, Google Wallet!). Using near-field communications, in time the iPhone could replace the plastic credit-card as the way iPhone users pay for lattes, groceries or impulse buys. In short, iTunes may be about to graduate from a way of buying apps and music to a way of buying all kinds of things.
That could only be good for Visa and MasterCard, right? After all, the credit card processors would benefit from an increased volume of transactions. But they may not be entirely pleased with an increased volume of transactions from Apple, given the way iTunes handles payments for 99-cent apps and $9.99 albums. Apple aggregates purchases made over several days into batches, reducing the per-transaction fees that it pays to Visa and Mastercard. It gets away with this because, well, it’s Apple.
If Apple really wanted to disrupt the credit card companies, it could bypass them entirely, building its own online-payment infrastructure and offering discounts or other incentives to those who choose it for iTunes and other payments. Apple has the cash stockpile - $97.7 billion by some estimates - to do this. It also has the network infrastructure, and it could work directly with banks to strengthen it.
Would Apple take such a radical step? There are good reasons for Apple to create its own iPay-style platform. It would let the company keep for itself the money it pays to Visa and Mastercard in transaction fees. And it could expand its core hardware business with a new product line: point-of-sale terminals for millions of cafes, restaurants and retail shops.
On the other hand, creating an iPay platform that bypasses credit card companies is fraught with complexities and obstacles. Few companies have even bothered trying, PayPal being a notable exception. Most services, such as Google Wallet, are content to offer a front-end interface that lets users plug into the incumbent credit giants.
To pull off such an ambitious plan, Apple would need to persuade many of its 400 million iTunes customers to trust it to handle payments for everyday purchases. Passbook may be an experiment to test consumer behavior around making non-iTunes transactions on iPhones. But more importantly, Apple would need to navigate the complex world of financial regulations, not just in the U.S., but in every country where it offered iPay.
The announcement of Passbook got Wall Street analysts wondering again about the likelihood of iPay. JP Morgan’s Moskowitz called Passbook a clear precursor to iPay.
Apple doesn’t seem impatient to turn Passbook or iTunes into something big like iPay. But the company’s technology has sprawled into so many other industries that it already has many pieces in place to become an overnight player in online payments. If it ever made such a move, the consumer credit card could go the way of the GPS navigation device.
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Getting funded is the first step toward every startup entrepreneur’s dream. But while receiving an infusion of cash from a venture capitalist or angel investor is certainly a good thing, it doesn’t necessarily mean your company’s money problems are over. Even venture-funded startups can’t afford to divert scarce cash to everyday purchases, so one big tech vendor is trying to step into that credit void.
Startup businesses, particularly those that are growing fast, are in a constant state of acquisition. Hire someone? They’ll need equipment and a place to sit. It costs money to attract customers and clients, and even more to serve and retain them.
So even after a startup gets funded, founders may still need to make tough choices about where to invest scarce capital. To make those choices easier, last week, in what it calls a “first-of-its-kind” move, Dell introduced a $100 million initiative targeted toward newly funded small businesses.
The 10% Solution
A major part of the plan is a credit fund for small businesses. To qualify for the Dell Innovators Credit Fund, a business must have received funding from a pre-selected group of VCs or angel investors (Dell is adding new firms to the initial group) within the last 90 days. Qualified businesses can then access up to 10% of their funded amount (up to $150,000) in credit offered through Dell Financial Services, with what Dell calls “accelerated, limited credit terms.“ The fund is intended to help young businesses spend their investment capital on revenue-generating activities, not on technology purchases.
The fund was the brain child of serial entrepreneur Ingrid Vanderveldt (left), Dell’s first entrepreneur-in-residence, who noticed that many “entrepreneurs, even when funded, still weren’t getting the credit they needed.”
Further impetus came from a Technology CEO Council (TCC) paper indicating “an outsized share” of new American jobs is generated by high-growth startups. In fact, the TCC reports, most years about 40% of new jobs come from the top-performing 1% of companies. Also cited in the TCC paper was a study from the McKinsey Global Institute, which shows “Web-knowledgeable [SMBs], across a range of industries outpace their less Internet-savvy counterparts in job creation by more than two to one.”
Steve Felice, Dell’s president and chief commercial officer, says the new fund gives new companies “access to technology to help fuel global growth and innovation while helping startups preserve precious equity capital for other business needs.”
Help Going Global
In fact, expanding internationally can be the key to growth for many small businesses. As Karen Mills, the administrator of the Small Business Administration points out, nearly 96% of the world’s consumers live outside the United States. Felice believes technology helps startups go global by “enabling them to get access to more markets, more countries and more supply chains.”
Of course globalization also means small businesses in foreign countries will now be competing with you for customers. But Felice says “small businesses need to realize that the world not only [provides] customers, but can offer partners as well.”
Felice is a big believer in the power of entrepreneurs: “If more of us don’t do something to help entrepreneurs get their ideas to market, economic instability will continue.” The goal of the Dell fund, Felice says, is to help entrepreneurs “fuel their great ideas.” If Dell’s move encourages other lenders to offer credit to startups, it might actually make a difference.
Disclosure: My company, GrowBiz Media, produces a newsletter for the Dell Women’s Entrepreneur Network, and I will be attending the DWEN meeting in India later this month.
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When it comes to financing a brand-new startup, most founders find themselves stuck between the proverbial rock and hard place. While some lucky startups attract angel investors or have access to money from friends and family, the vast majority are on their own, at least at first. That’s why it’s so tempting to use credit cards to jumpstart your business. Entrepreneurs who’ve maxed out their cards warn that while it may be necessary, it can also be dangerous.
The relatively low cost of starting a tech business today has made this choice more enticing than ever. If you need only $5,000 or $10,000 to get going, is it worth the risk to put it on your cards? “I’m seeing more people using credit cards for financing,” says David Worrell, founding partner of Rock Solid Finance, which helps business owners find solutions to their financing problems. “These days nobody’s got any collateral, so it’s a choice between cash and credit cards.”
Beware Revolving Credit Charges
When Bob Herman founded Tropolis Group in 2010, he decided to finance with credit cards so he could take advantage of a cash-back rewards program and use the bounty to buy supplies for the business. So far, Herman has put about $60,000 on his credit cards, using them mostly to finance software development.
To ensure he didn’t get in over his head, Herman says, “I only put monies on the credit cards for which I know I have corresponding payments due from customers. I then pay off the cards in full each month to avoid the high interest on revolving credit.”
It hasn’t all been smooth sailing. “At one point, we had a customer not paying their bills on time for which we had already placed funds on a card,” Herman says. After diligently following up for payment, eventually he got the customer to make most of the payments. “I did have to write off a portion of the receivables but was able to recover the following month using revenues from other projects.”
“I advise using revolving credit only if you will receive value from a cash-back or points program, and if you’re sure you can pay off the balances in full each month to avoid high interest charges,” says Herman. The strategy has paid off for Tropolis Group, which now includes AppTropolis, BagTropolis, IT Tropolis and ShipTropolis. Sales have doubled year-over-year since launch, and Herman expects them to double again in 2012.
Don’t Forget to Pay Off Your Cards
Vincent Turner, founder and CEO of Planwise, a startup that helps people better visualize the future financial impact of their life plans, learned the risks of financing with credit cards the hard way from a previous startup. Before getting venture funding, Turner had used a personal credit card to get the company going. When a group of investors bought out the original investors in 2010, he recalls, “they raised heaps of additional money, but were never prudent enough to pay off the $8,000 debt on my credit card.”
As the company began to flounder, Turner stepped back, not realizing the investors had never paid off his card – they were just servicing the debt. When the business went bust, responsibility for the card debt ended up back with Turner: “Now the bank is hounding me for full repayment.”
The experience shaped how Turner funded Planwise. “We never make any commitment to spend money unless it is fully funded,” vows Turner, who financed the startup himself and then secured angel investors. He does have a business credit card, but its credit limit is $5,000 and he uses it only for small purchases.
Both Turner and Herman are playing it smart, according to Worrell. “As a tool to help you grow or manage your finances, I think a credit card is even more essential than ever,” he says. But you need to be careful about how much you spend, and never charge more than you can afford to pay off.
Also important: “Always match the source of money with the use,” Worrell advises. “For example, use a credit card for short-term [needs] and pay it off in the short term.” You shouldn’t use credit cards to pay salaries or rent, but you could use them to buy supplies or finance a short-term project.
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