Is it Wise to Charge My Home Business Expenses to My Personal Credit Card?

When you read testimonials of a few successful Internet entrepreneurs, it may be common to read that in their past they are "maxed out their credit cards". At this point, I can hear you thinking out loud, "but they made it anyway … and so can I". I wish that would be the case for every Tom, Dick, Harry and Sally, but the improper use of credit can be devastating to some not only for their personal businesses but it negatively pressures significant family relations as well.

So let's ask, "Is it wise to charge my home business expenses to my credit card?"

The answer to that question is, "It depends." You see, the use of the credit card can work either to the benefit or detriment of the one using it. The intelligent questions to ask are:

1. Do I have sufficient cash on hand to purchase this right now?
2. In my current capacity, can I afford to buy this right now? "
3. Why am I charging my credit card for this item?

Firstly, if you are personally "liquid" enough to purchase this item, and if you have set it as necessary for your business, then yes, it is wise to use your credit card if you will have the deduction to take the cash out of your reach, keep it someplace safe, (like in a savings account or piggy bank) until such time to settle your card statement comes.

Secondly, to say "you can afford to buy or purchase" an item means that you are not sacrificing any other basic needs of your family such as the grocery or utility bill budget. It means you really have a "surplus" tucked away someplace. It can also implying that if you are deferring a payment, you are absolutely certain of a cash inflow that will sustain this expenditure such as scheduled bonus or lumpsum to be received for sure. Otherwise, re-evaluate your position. If you can pay the FULL BALANCE in one payment, then yes – you can definitely afford it.

For those who choose to defer payments, credit card companies may impose a finance charge of as much as 3.5% a month for the revolving balance and that accumulates to about 42% a year! Compare that to the yield paid to you if you had a deposit, say 3% per annual, then you are spending so much in finance charges and your business has not even taken off yet. Perhaps interest rates, are of a different level in your country, find out and compare. It pays to know!

Thirdly, there are other reasons to use credit cards. Convenience is usually the key reason, but it has its own responsibilities that go with it. Cashless transactions has its perks – no bulky bills to tug around or no risks that thieves will snatch them from you. But then, the same security mechanism we devote to our cash holdings should also be exercised for our credit cards. Because they too, may be swiped and stolen from us. So, we have to be vigilant.

And I almost forgot, most credit cards offer a reward system or points such as freebies, or cash-backs. That can also be a good reason to charge items to your card. The bottomline is, determine if you can afford to pay it – if you can, go ahead and charge it!


How to Choose Your Prepaid Visa Travel Card

There is one ultimate prepaid Visa travel card called the Visa TravelMoney. There are a couple of bank and store vendors that sell this travelers' card. If you are interested in getting one, you would want to get yours from a good vendor.

The Benefits of Visa

When it comes to the main advantages of Visa, you do not have to be particular with card provider choice. All Visa cards from any provider are provided to offer you the benefits that come with owning a Visa travel card. The perks include:

– With TravelMoney you do not need to carry cash anymore. There is therefore no danger that you will be in a predicament in case your cash gets stolen. This Visa card is honored in any store or ATM that accepts Visa.

– As a cardholder you also enjoy the safety and security guaranteed by Visa. Your signature and PIN are your first lines of defense. You can also rely on the US Bank Zero Liability. When your card is stolen or lost it can be replaced and you can even get your balance back. A secondary card option is another way to protect yourself if you lose your card.

– Since the card is prepaid, you do not need to put all your monetary assets in one account. You can load your card with just the right amount for your trip. If you do run short though, this card offers you the option of relating.

– With Visa, you have extra perks. You can take advantage of travel and emergency services or reimbursements of lost luggage.

Provider Options

Do not worry. Card providers do give the same prepaid Visa travel card advantages. You do have some other aspects to consider though when you pick your card provider.

– The major point of consideration would be the fees. All providers charge a variety of fees but they may have different fee values. It may help if you are a bank client, in which case, you may be able to expect discounts on the fees that you would have to pay.

– Other fees also varies across providers. Some of the fees that you would have to look at include processing fee, shipping cost, enrollment fee, reload fee, card personalization fee and secondary card cost. Some providers do not charge their regular clients a preliminary enrollment fee.

– The prepaid amount in the card may vary. The usual limit is $ 5,000 but the minimum load can vary.

– You would also have to consider how a provider sells the product. As a client you will clearly appreciate a provider that can give clear and complete card benefit information. This includes user warnings and tips.

As a traveler, you will not need any other financial tool other than the prepaid Visa travel card. This is the most convenient option if you want to travel safely and securely.


Credit Card Minimum Payments to Increase Soon

To try and save us from ourselves, the Office of the Controller has recommended that credit card companies make their customers pay higher minimum payments, up to double the current amount. This will affect at least 7% who currently only pay the minimum and those who can only afford to pay a small portion over the minimum.

These days the average consumer has 4-6 credit cards and $ 8-20 thousand dollars in credit card debt and rising. Paying only the minimum and never charging again will keep you in debt for 30-60 years, depending on interest, late fees and over limit costs.

The guidelines to raise the credit card minimum were made in 2003, but the banks and credit card companies wanted some time to ease into it. Some say, they waited until the new bankruptcy laws were in effect, so they would have less to lose. There's no set date when your credit card company will start increasing your minimum payments, just know they will and probably soon. Some already have. I have read dates from July to October of this year and many thought it was going to happen last year, so be warned.

What can you do, if you will not be able to afford this increase?

You can contact your credit card companies and see if any will work out a lower payment for you on a temporary basis. Keep in mind that frequently, when you have payment arrangements like this, they will not let you use your credit card, so keep at least one available for emergencies.

You can hire a debt consolidation company to get a personal loan for you and pay off all your credit cards. Personal loans usually do not have very low interest rates, like a home equity loan or refinancing your home. If you do not think it will take you too long to pay off or you do not own a home, this may be the way to go. You can also hire these people to make payment arrangements for you or charge off some of your debt. Be careful here, any debt that they get "charged off" for you will show that way on your credit report, lowering your credit score dramatically, and you will have to pay taxes on the charge off amount as income.

One solution, including trying to curb your spending, is to either get a home equity line of credit or refinance your home. The interest rates are lower than a personal loan or credit card and spread out farther, so you will pay a much lower monthly payment. You always have the option of paying more than the minimum when you can afford to.

If your debts are moderate, but you may need more in the future for home repairs, my suggestion would have to go with the home equity line of credit. Get approved for a little more than your debts and expected home repairs, so you will not have to worry about getting another one for a while. Try to pay more than the minimum whenever you can without risking your cash flow.

If you have a lot of credit card debt, home repairs that need to be made, an unstable job or other situation that could make matters much worse at any time, you should probably consider refinancing. If it's been at least a year or more since you purchased or previously refinanced your home you probably have enough equity, depending on where you live of course. Also, if you've been making your payments on time for the past year or more, you'll have a good payment history and should have a good enough credit score to get a decent rate.

If you have late payments, you still may want to consider refinancing at a higher rate, as a temporary solution. Your interest rate will probably be much less than your credit card interest, so you'll pay a lower monthly payment and not risk ruining your credit or worse, losing your house. If you pay all your bills on time for the following 1 to to 2 years, you can refinance again to get a better rate.

If you think that the rise in credit card minimum payments will affect you adversely, try to make a decision on what you are going to do about it soon. The longer you put it off, the harder it will be to deal with in the future.


Credit Card Debt Settlement Letter – 'How To'

Writing a credit card debt settlement letter can be scary but if you write your credit card debt settlement letter properly, you can eliminate much of your debt. Let's discuss how to write your settlement offer properly so you achieve success.

To begin, a credit card debit settlement letter is as the title suggests, a letter that you write to your creditors in which you negotiate for or request that they settle your reduce the balance of what you owe. The credit card company then responds with an offer of settlement, in which they will agree to a payment plan or to forgive a portion of what you owe, this will be their counter offer.

The negotiation for the settlement of your debt will continue until you reach an agreement with your lender. It is common for the card company to settle a half to two thirds of your debt in order to settle the account. The lenders, for accounting purposes would rather walk in most cases than to continue to hound you for any delinquent accounts.

You will want to write your debt settlement letter and negotiate in writing with your credit card company so that you document any offers they make from start to finish. Avoid negotiating over the phone with your credit, but if you do, make sure that they fax any offer directly to you so you have documentation.

When writing your credit card debt settlement letter be sure to follow these guidelines for success:

  • Begin your debt negotiation very low, do not worry about being outrageous, they will counter your offer and you never know, they might accept.
  • Make it very clear to your creditor that you intend and wish to pay your debt, but are unable to, detail your hardship, and communicate with them as they are more willing to help than you might expect.
  • Check your debt settlement letter for spelling and grammar errors, and write as clearly as possible.
  • There is no need to sound 'legal,' it is OK to sound like an average person and not a lawyer, just clearly state your purpose with the letter.

There are services that can help you with your credit card debt settlement letter if you do not wish to do it yourself. Attorneys can help and they are knowledgeable and it can be beneficial to consult an attorney, but they are expensive, and for smaller debts it is not necessary.


How to Answer a Summons For Credit Card Debt

When a stranger hands you legal papers – READ THEM and do not avoid them. To avoid being served legal papers only delays the inevitable and can cause more harm than good. Even if you have not been properly served, you can still appear in court and argument this point. However, keep in mind that just about every court will allow the person who filed the law suit, a chance to correct this technical error.

A collections law suit for credit card debt includes a Summons and Complaint and it is important to read these documents thoroughly. You'll only have a limited time in which to respond, generally 30 days, to the law suit, so it's important to take action quickly. If you choose to do nothing, the creditor will obtain a default sentence against you and gain the ability to levy your bank account, garnish wages and lien property you may own with that judgment.

If you decide to fight the law suit, here are some VALID defenses:

  • Service in not proper (check your court rules on proper service of a law suit)
  • The Statute of Limitations has run (This varies by state; California has a 4-year statute of limitations on written contracts)
  • You do not owe the debt or this is a case of mistaken identity

If you owe the money, here are some steps you can take immediately upon receiving a summons:

1. Call the law firm representing the creditor and negotiate a settlement that may include a payment plan;

2. If you can not afford the repay this debt and you have other debts, consider that filing bankruptcy could save you time and money in the long run and completely eliminate this debt and stop the law suit.

If you DO NOT OWE the money, or you think the law suit is part of a scam to defraud you, I recommend hiring an attorney immediately. In such extreme cases, a consumer protection lawyer may take these cases on a contingency fee basis, which is to not charge you up front for fees where you may have other causes of action for a counter law suit for violations of the Fair Debt Collections Practices Act, Fair Credit Reporting Act, or if you previously filed bankrupt and discharged this debt, then your case can be reopened to sue the creditor for trying to collect on a debt when they are no longer allowed due to your bankruptcy discharge order.