Understanding the Elements of an Overall Credit Card Processing Fee

As the holiday season comes into full prime, educate yourself on what is happening every time your credit card gets swiped.

Credit card processing is a crucial consideration for many businesses. With this borne in mind, it is necessary for a business (and consumers) to understand fully the charges associated with credit card processing.

 Credit Card Processing Fee

Three basic components are associated with the overall costs of credit card processing. The components of the overall free include the free paid to the bank that initially issued the customer’s credit cards, a fee paid to the card brand itself and a fee to the company that actually facilitates the processing of a particular charge. These fees vary in amount by financial institution.

The fee paid to the issuing financial institution is called the interchange fee. It is calculated using a percentage of the total transaction plus an additional nominal charge.

The fee assessed by the credit card brand also typically includes a percentage and a flat fee. However, in the case of Visa, that brand also charges a merchant an additional monthly fee.

Finally, the processing fee itself is a set amount for each transaction. Keep in mind that the processing fee is the only component of the overall costs associated with credit card transaction processing that is open to negotiation. The interchange and brand fees are set and cannot be changed.

Moving forward, this information should help you understand where the money is coming derived from credit card processing fees.

How to Destroy Your Credit Score

Most people want to learn how to build their credit rating. Conversely, it also pays to learn how to destroy your credit score, if only to avoid doing so.

A high credit score is what everyone would want to have. You are granted loans easily and credit card companies are only too eager to have you for a client. Cars and a house – what American doesn’t aspire to have them? Auto financing and mortgages at lower interest rates won’t be a problem if your FICO score is high.

Destroy Your Credit Score

But did you know that, while building a credit score can take years, it takes only a few months to destroy it? Here are a few selected actions that can damage your financial name real fast and tear to shreds what you so painstakingly built over time.


Your payment history comprises 35 percent of your total credit score, so delaying or failing to make payments altogether is the quickest and most effective way to bring it down. Only one incident of not paying the minimum amount of a loan or credit card debt within 30 days of the due date can lower your credit score by 100 points. You can always get back that 100 points, or so you rationalize. True, but getting it back takes longer than letting it go in the first place.


Credit cards set a maximum limit for the cardholder to spend. While charging everything to your credit card is so tempting, consider how it can affect your credit score. The amounts of money you owe, wherever it is coming from (credit cards, loans, etc.), make up 30 percent of your credit score. Thus, every dollar you charge to your credit card is seen as money owed by you. This increases your credit utilization ratio. A rise in your credit utilization is inversely proportional to your credit score and the bank or card company views you as a spendthrift. They may not grant you a loan and if they do, it will have a higher interest rate than someone with a better credit score.

Advice from authorities in credit card usage says you should keep the balance on your account at 35 percent of your credit limit or lower if you are aiming for a high credit score. This shows your maturity in debt control and you are perceived as a low-risk credit person.


Get a new card, transfer the balance of your old cards to the new, and then close out those cards that you’ve had for years. Sounds like good business sense, doesn’t it? Banks don’t quite see it that way. Since 15 percent of your score is based on length of credit history or how long certain credit lines have been open, that old card you’ve been using is proof that you are a member of good standing in that card company. If you must close out credit cards because you have too many, choose the newer ones to preserve your credit.

Destroying your credit score is not a good option in the long run. Give it a lot of thought before you do it. You may live to regret it in the future.

Proven Credit Score Improvement Tips To Follow

Credit scores are essential since they determine future eligibility for any financial assistance from financial institutions. Thus, if you have a low score, it is more than likely that you may not get a home loan or mortgage. All you need a better credit score.
Many compare credit score improvement to losing weight. The idea is to hold patience and not look to any quick solutions, as they tend to do more harm than good.
Credit Score Improvement Tips
Some good ways to keep control on your credit score is as follows:

Payment alarms:

One of the most important factors which help keep the credit scores good is timely payments. The best idea is to provide the bank where you have an account direct debit instructions. This means that the bank should be given standing instructions to deduct the amount on due date. Further, minimum amount due should not be paid. Whenever possible, opt for paying the entire bill value.

Errors and differences:

There are times when the credit card company makes errors. One can dispute these errors through designated agencies in this regard. Hence, you should scrutinize the statements carefully.

Monitoring balances:

You should be able to manage the score by better control over the revolving credit balance of the card. The lesser the ratio, better the credit score. In order to keep this factor in check, experts suggest to ensure that the balances are kept low by constantly paying them off on time. This is better since even if the entire balance is paid off, it does not negatively affect the utilisation ratio. Thus, it could still remain higher since the statement balances usually get reported by the banks to the bureau. Thus, credit scores will still reflect the monthly balances in spite of full payments each month.

Credit limit:

You must keep real time track of changes in credit limit. If the card issuer has forgotten to update the new credit limit in the statements, then bring it to notice immediately. This is so since regularly exhausting the credit limits completely does not look well. Thus, reducing the credit utilisation will translate into better scores. This can be also be done by taking advantage of pre-approved offer based credit cards which increase the total credit available. A word of caution here is to choose the card issuer carefully. Be wary of those issuers with high rates of approval since they adversely impact credit scores even if for a little while. Ensure the new card does not have annual charges and is low on interest charges.


You may want to have one to three credit cards. The use of plastic will do wonders for your score. This is subject to being a responsible user. Thus, make payments by due date positively. Experts nowadays advise to go for a secured credit card which has reporting obligations to all the major credit bureaus.


For those who wish to improve their credit eligibility, the issue is usually credit history. Reasons such as delayed payments consistently and defaulting on dues, add negatives to the credit report. Negative actions such as delinquencies remain on record for up to 7 years, bankruptcy and tax liens – 10 years and inquiries up to 2 years.

Credit report accuracy:

A study conducted by the Federal Trade commission in 2012 stated that error in credit reports had a recurrence ratio of 1:5. You should always ensure that the credit report is reflecting accurate details of your position. This is essential since the credit line is based on this report. These reports can be accessed relatively easily online. The errors if any found should be reported to the issuer. Reports from all the 3 major credit score institutions should be checked, since error in anyone can impact your credit limit.

Debt management:

It is advisable to leave old debts on the report. They basically are evidence of debts which have been paid in a timely manner. This shows good credit worthiness. Further, old accounts where the payment record is impeccable is preferred as well. Thus, advisable to let them be on the report longer.


There are instances where due to some unforeseen exigency payments are missed. You should attempt at getting the creditor to agree in writing, for a settlement. It can either be a complete removal or a “paid as agreed” reporting from his end. This can usually be done through a letter where you promise to pay the balances unpaid on date. One may also apply for removal for negatives on account of past history where there were no misses.
Regular and responsible use of the credit card aids in enhancing the credit score. Hence, automatic payments are suggested to ensure that deadlines are not missed. Some people also try to use other people’s good credit history. This can be done by getting added as an authorised user in their card. You should also refrain from unplanned card applications as the inquiries for the same impact the credit score as well.

The Ultimate Credit Card Management Tips

Everyone looks for tips on how to manage credit cards. Often, these are the ones that give us severe financial troubles. However, you should know one essential truth with these things, there’s no single tip or guideline or advice to correctly manage your credit cards. This article can give you simple thoughts but the rest of the methods are up to you. Later on, you will discover that you have more options rather than just looking at these words.

basic finance tips

The real answer is right in your hands so, if you’re ready, here are some of the useful pointers for your credit card management.

The Stand.

Your credit interest rate and credit limit can depend on your credit history. The sad news is that a lot of people do not know how good or bad they are. To overcome this, you should pull your credit report from about three credit reporting agencies. There are free services in which you can get this data from like the AnnualCreditReport.com. It will show you the factors that can greatly affect your credits like late payments. All in all, more negative records will mean less chances of having the best interest rates.

The Chances.

To get higher chances, you have to wait. For about six months, you should fix everything with your former credit problems. The most important thing to remember is to put everything in order. As a guide, you can use your credit report. Basing in your credit report which you should first check for inaccuracies, learn about the mistakes that you have made and start from there. If not paying on time is your problem then make a habit to pay earlier or better. The bottom line is that you should stand up for good record. This will help increase your chances in getting the best benefits later on.

Experts advice that even if you can’t  afford to pay the full sum then at least pay the least amount. It will help you to avoid hefty penalty fees.

The Benefits.

Let’s assume that your credit is now in order and so, the next move is learning the kind of benefits that you really want. For example, if you love to travel, then it’s good to consider cards that are affiliated with hotels or airlines. These cards should also allow you to have reward points that can be used to buy tickets or hotel bookings. If you are a road freak, there are cards that have gas rewards. Just know your type of life and base your credit card benefits there.

It’s always a great idea to use one credit card at a time to optimize the benefits. Use Visa, Mastercard or American express as they are accepted everywhere. Amex card by and large gets you more points on every dollar spent.

However, it is beneficial to use an extra credit card if you have a business venture and want to compartmentalize between your personal and business expenses. If you are a globetrotter and are fond of traveling to foreign countries, then using Westpac credit card is a convenient option to consider.

Beware of the fraudulent activities if you have already acquired the EMV chip card. It is believed that the skimmers devices  can steal your confidential credit card information effectively. Closely monitor your credit reports and statements for protecting against frauds.

Our credit cards are often more precious than we think it to be. It can provide rental car insurance, trip cancellation insurance, purchase protection, price protection and even prolonged warranties. During shopping and vacation, these things can make a great difference and save up plenty of dollars.

The Records.

Though it looks good to pay the minimum amount every month since it only uses lesser money from your pocket, you have to consider it again. Interest rates between 13 and 15% is the  minimum payment that will increase your payments later on. Therefore, the key here is to charge only those that you will be able to pay each month. Next, pay on time. You can actually set up an automatic payment so that in case you forget about this, you won’t have to worry. If you are consistent with this, it can boost your credit score which means you will have lower interest rates. Lastly, consider your limit. One of the best factors to calculate your score is called the utilization rate. The lower your rate, the better your score will become.

The Laws.

Credit card laws are your friends. That’s one thing you should realize for a fact. Two huge acts that cover credit cards are the Credit Accountability Responsibility and Disclosure Act or CARD Act and the Fair Credit Bill Act. The first one eradicates a lot of typical but questionable credit card practices like retroactive rate increases, double-cycle billing and applying to lower-rate balances. Also, this act requires advance notice for rate hikes and more provisions. The second one is about all the rights of the card holders the moment he encounters a billing dispute with the credit editor.

Set a budget from the beginning

In order to keep  a track of your expenditures, it is important to set a budget on your credit card right from the beginning. It will help you understand where you are spending your money and what  should curb your spending. Credit card owners also  should check their transactions regularly.  They can use both PIN numbers or signature while operating it. At familiar shops and trustworthy companies, using PIN operated credit cards are the best. Many  modern credit cards come with an integrated  microchip for more safety and protection.

Knowledge of these things can greatly help you master the world of credit cards. These tips will really pull you off from credit card trouble you may be in today. If you have any question contact me today!

Steps to Get Rid of Credit Card Debt

Debts like credit cards and other consumer debts are wretched parts of the American households. Credit card companies put up attractive ads that promise to shower all sorts of freebies to their customers. According to the Federal Reserve, nearly 58% of the common people have outstanding credit card balance.

This shows that people need to start taking steps to get out of debt that is incurred because of unwarranted use of credit card.

Steps to Get Rid of Credit Card Debt

Here are the steps to eliminate credit card debt endorsed by the financial experts:

Start budgeting – Budgeting is best way to know about your financial health. At the onset, this might be a difficult task for you, but with continued focus and dedication it will become easier to follow. Budgeting is important because it will help you to identify the reasons for your bad purchases.

You should keep aside a part of your monthly income for recreational purpose. This is because essential monthly expenses like mortgage payments, house rents, groceries, insurance and so on will take up the lion’s share of your salary.

Creating a monthly plan for your expenses can certainly help you to stay inside your budget and increase your capacity to repay all your loans.

Make a list of all your loans- Make a complete list of your outstanding balances, interest rates and charges and rank them. Mortgage payments and vehicle payments may take the loin’s share of your monthly income since they fall in shelter and transportation category.

You can also trim your monthly expenditures to accelerate the loan repayment process and find new ways of reducing your expenses. You can also monitor your expenses and save up each pennies.

Deal with one credit card at a time- If you cannot cope with multiple credit cards, then deal with one at time.

Refrain from more debts – You are already overwhelmed with the present debt amount, and it would be wiser on your part to stop adding any more debt and increase your burden. If you keep using credit card irresponsibly, then you are digging yourself deeper into debts. The biggest challenge would be at this time is to abstain from all kinds of loans when you are already struggling.

Pay the maximum amount- The more you pay down each month, the quicker you can free yourself from all the financial nightmares you have. Those who make the minimum payment, their loan may continue for lifetime.

Use cash frequently – You must start using cash frequently and avoid keeping those cards with you. You may tend to overspend, if you carry your credit cards with you. Therefore, it will be a lot helpful, if you use cash to pay for almost everything. This way you’ll feel the pinch, every time you take out the money to pay someone and eventually save some good money.

Request for low interest rates from creditors- You can get a reduced interest rate on credit cards if you have a good past track record of repaying loans or you are a long-term customer who makes payments on time. The creditors may spare you and ask for lesser interest rates which will help you to save thousands of bucks annually.

Make more debt payments – You must make good use of all the spare cash left with you. Add those extra cash to the debt payment amount to pay off your highest interest rate debt, faster.

Ask for loan from friends and family members- This could be a good option to get rid of credit card loans quickly. If they agree to help you, do not forget to use a written contract with an established schedule for repaying and interest rates. Pride and peer pressure could motivate you to repay your debts to them as soon as possible.

Once you start living within your means, follow a good budget and reduce the unnecessary expenses, then only you can eliminate all your debt problems.

Credit Tips To Keep You Out of the Red

Have you ever wondered how others appear to be so successful and do the same job you do? This appearance is due to the fact that they follow several steps to keep themselves financially in line. You are about to read some steps you should start to take to get yourself going into the right direction.

credit card tips

Be strict in spending less than you earn:
You need to be strict when trying to spend less than you take home in your paycheck every time you get paid.  For some people this is easy, for others it is impossible and for people who have unforeseen bills such as; medical illness, disease or vehicle accident it is also close to impossible.  Hopefully, a person using credit to pay for these bills can bounce back from the inevitable costs by spending less than they earn. Also, spending less will give you a little extra something in your bank account that will accumulate. Some people even open a separate account to put a percentage of their check into and leave it alone.

Budget your salary and necessities:
Budgeting is one of the best ways to stay on top of your bills, but you also have to be strict with it. There are several ways platforms you can use to create a budget. First, decide whether you prefer to do it on a computer or with pen and paper. Paper is more of a manual approach with the exception of the calculator. You can get a a business planner with ledger at any retail store. Computers however, can do all the data manipulation for you. A popular software to start your budget is Microsoft Excel. There are also several other accounting and bookkeeping packages out there on the market today. So take your pick.

Pay your credit cards full and on time:
Avoiding high and outrageous interest rates, you must pay your credit cards in full and on time.  This is not always an easy task done by most.  You must do your best to pay on time and do what you can to pay more than your monthly payment if you can’t pay off the whole thing. Never pay the minimum amount required.  That will leave you at the creditor’s mercy.  They love that you pay on time and do not mind you paying the minimum. By letting you pay the minimum amount, they get to charge you the highest interest rate and still require you to pay back every cent of your original borrowing amount.

Keep organized:
Keeping organized sounds like an obvious statement, but it goes further than just keeping all your bills on the kitchen table so you know where they are.  Being organized will help you understand where your money is going and where it should be going. Organize your bills by a category that will be easiest for you. This could be by company or alphabetically, but you do what is easiest for you.  You can even take it further and organize each category by a sub category. This could be by account numbers or billing dates.  This sounds like unneeded work, but if you ever need to go back and look at something that is questionable, you will be happy you were thourough prior to the request.

In conclusion, following these steps or procedures will enable you to reach your financial goals, it will not happen over night, but it will happen.

Understanding How Student Loan Debt Affects Your Credit Score

Are you aware of the adverse impact of student loan on your credit score? The peculiarity of student loan is that it scores down your credit point though you have not defaulted on payment and just obtained the fund. The effect is so spontaneous that there is no scope of enjoying better interest rate. 750 point is considered favorable to take advantage of lower interest rate but student loan pulls down the score to 500 or below, thereby leaving you no chance to take advantage of favorable interest rate. As a result, a chunk of your money is drifted towards interest payment that is quite a heavy sum to bear.

Student Credit Score

The question is why student loan inflicts so harsh impact on one’s credit ranking. To understand this point, you need to know the complexities involved in student loan transaction.

Exaggeration of Truth

Yes, that is a common case in student loan borrowing. The amount recorded in the credit report sheet is the triplicate of actual sum you borrowed. For example, if you have taken out $6000 as student loan, it will be entered as $18000 in your credit report. This false statement exacerbates your case not only in terms of drop in credit point but also through the hike in interest rate on principal.

Early Payment Lowers Score

It is hard to believe that early payment negatively impacts one’s credit score instead of pushing it up. But that is the oddity about student loan. The point is the lenders don’t want to lose additional interest rate and never want the borrowers to payback before due date of payment. If you pay off before the scheduled period of time, the creditors might send an unfavorable report to the credit agencies and that will result into further drop in your credit rank.

Long Time of Repayment Drops Your Score

The usual period of repayment for student loan is minimum ten years. Such a long time span induces an unfavorable impact on your credit report. Though the repayment term is agreed by both the parties, still the credit report mentions ‘too long to pay back a debt’ which adversely affects your credit history. Another disadvantage is even a single student loan may be recorded in such a way that equates with seven different types of borrowing. This also scales down your credit point.

A Way Out….

In spite of what may be said against student loan borrowing, it is a good pipeline of monetary resources for those who need support to afford higher education expenses. A good way to evade the negative impacts is to opt for consolidation of all existing loans. When the outstanding dues are combined, regular interest payment is reduced to much an affordable border.

Contact an experienced loan counselor. You can also hire an online service provider to help you with consolidation program. The debt consolidation companies also extend help to those who need to improve their sliding credit score. Following these counter-active tips will help you pay off student loan sooner and at the same time, up your credit point.

Credit Score the Key Factor of Your Personal Finance

The recent economic problems that have hit every country have meant that households have often been faced with financial problems, often unemployment and sometimes repossession. No one saw the problems coming in an environment where real estate value was rising and credit easy to come by. As it turned out this complacency was soon shattered.

While there continues to be demand for finance those who defaulted on any debt during recent years will only qualify for bad credit loans because those defaults hit the individual credit score by which the vast majority of applications are judged.

There is money available with many internet lenders happy to look at individual cases and provide bad credit loans as long as the applicant can show how he or she will pay the monthly installments. That is primarily by proof of employment, earnings and recent bank checking account statements which will show recent credit history.

Everyone’s aim must be to improve their credit score which can be done by paying off any bad credit loans promptly.  As the credit score improves and it will improve not only by prompt payment of bad credit loans but also of utility bills or store card payments, then the interest rate on any future borrowings, including possibly a mortgage will come down. Every percentage point on a large loan like a mortgage can mean a considerable difference in the repayments.

It is worth asking for details of a credit score; sometimes there are errors which can be removed if there is evidence that can be shown. One thing that must not happen in the future is late payment so setting up automatic repayments, or getting auto reminders of when payments are due is advisable. While an automatic payment of the minimum on a credit card avoids a default it is still poor money management just to do that and extra repayment should follow.

There is nothing wrong with credit cards used responsibly; even multiple cards but those which have a facility but are not used will be closed eventually by the credit card company and that can adversely affect a credit score because it may just be marked closed, and that can create uncertainty therefore be an unnecessary black mark. Using a fairly dormant card periodically helps.

A credit score is affected by the amount owed against the overall facility a person has. That means reducing debt while still maintaining a high facility, for example with credit card limits, will be favourably interpreted in a credit score. Bad credit loans can gradually become a thing of the past.

Some things can stubbornly stay part of the detail that calculates credit score for some time but other responsible financial activity that is current can gradually improve the credit score. When interest rates and approvals are so dependent on a credit score repairing any damage is very important particularly for someone young who may not have yet applied for their first mortgage.

The financial environment is slowly improving. Improve with it!

10 Credit Improvement Tips to Up Your Financial Standing

Low credit point reveals your inability in money management. Not only that, it also obstructs in obtaining bank loans.

Let us now guide you through some credit improvement tips.

Credit Improvement Tips

Ask for your credit report copy

This is the foremost thing you should start with. You can start working on credit repair only when you have the details in regards to your credit record. Take a hard look at it; you will surely have some bad accounts that are spoiling the entire matter just like a fly in the ointment. There are three major credit bureaus and get report from each of them. Mark the areas which need immediate attention.

Remove the erroneous entry

Have you found any wrong entry in your credit report? If yes, then write to the credit bureau regarding the wrong listing and ask them for its removal as early as possible. An inaccurate entry brings your credit score down by more than 50 points. Once it is erased, a good aftereffect will show in your credit chart.

Pay back previous dues on credit card

Do you know how much your dues affect your credit history? More than 35%! More dues, more damage – it is just a simple equation. Your creditors directly repot the credit bureau regarding your dues and it hampers your status. Meet your credit card issuer and convince him to re-age the account. It will show that you have always been regular as far as timely payment is concerned.

Don’t apply for new credit cards

When your credit record is undergoing repair, don’t try for another credit card. Further credit inquires will negatively impact your score. Furthermore, a new card will curtail your credit age, implying a disadvantage for your already ailing credit record.

Pay off debts

Unpaid loans affect 30% of your credit score. So, clear them in full. If you can’t afford to pay back all dues, sell some of valuable possessions. It is a worth sacrifice to enjoy financial freedom through credit rank improvement.

Say no to new credit card buy

Credit card purchases will up the ratio of balance on credit card and credit limit. Higher balance will affect your credit rank more and more. So, make it a habit to pay in cash at least until the time your credit is back on the line.

Make sure to have accounts open

Closing even a delinquent account may infuse negativities into your credit record instead of improving the rank. So, don’t be in such a hurry.

Consult a professional

When you are at a credit mess, professional help can successfully get you out of the trouble. An expert will give you a complete guidance how to come out of troubles and not to slip into it any further. You may want to read Credit Zeal’s review of Sky Blue Credit who are one of the reputable credit repair companies in the industry.

Talk with your lenders

To your utter surprise, you may get the most valuable guidance from them. They even go far to reduce the monthly payment until you stand on your feet once again.

Have some patience

Nothing will change within weeks. At least six months – yes, that is the minimum time to pull out your dipping credit status. Be patient to witness a rosy picture in future.

Prepaid Cards vs. Credit Cards

New technologies have changed not only the way we live, but the way we work, and the money we use. It seems just yesterday, that cash was the norm checks and money orders were the only ways one could transfer funds. Today, it is credit cards, not cash which makes up the bulk of money in purchases.

With so many companies now accepting credit cards instead of cash, it is more important than ever to possess one.  For newcomers however, the credit card market can be confusing. With so many different types, all with their names, promotions, interest rates, fees, and repayment schedules, it can be overwhelming to attempt to process all the necessary information. In these situations, taking a comparison approach can help decrease the confusion and help guide you to the best financial situation for your needs.

First, one should understand the options available: the prepaid card and the credit card. These two cards both work anywhere credit cards are accepted. Both are valid currency, and both have protections that cash and checks do not.

Even with their similarities, prepaid cards and credit cards have their differences.

Prepaid Cards:

Prepaid cards are available from many retailers. As the name indicates, a prepaid card is filled with money before it is used. Cash can be added to the card at kiosks and retailers that are participating. First, you choose how much you want to put onto the card, paying a small fee to add money. You can then use your card to pay your bills, shop online, or any other purpose. Each transaction can carry a small fee for the processing of the transaction, though this varies among card companies.

When the balance on the card is empty, the card will stop allowing you to spend money. Although you cannot spend more than what is loaded onto the card, in most cases, you can continue to load money in them for as long as you want.

A prepaid card also does not require a credit history. Anyone can purchase and load a prepaid card, even if they do not qualify for regular credit cards, checking accounts, or debit bank accounts.

Credit Cards

Credit cards are issued through banks and have a preset limit. The lenders will then check credit histories, job histories, income levels, and credit scores to determine interest rates and lending amounts. This leads to many applicants being denied credit cards due to their past mistakes or lack of a credit history.

Credit cards will often allow a user to go beyond their credit limit. In exchange for this service, a fee is added to the balance of the account. A user will pay interest for carrying a balance of purchases from month to month.

If someone loses their credit card, they can report the card lost or stolen. This process freezes the card and opens up an investigation about purchases from the time the card was lost. If the card is used without your permission or knowledge, you are not liable for those purchases.

Understanding the similarities and differences between regular credit cards and prepaid cards can improve your decision making. Selecting the right card for your financial needs can help save money today and in the future.