Seattle Mazda

We Make Money Work In Your Favor

This content shows Simple View

Account Management

Avoid late fees

If you don’t pay your rent on time, the landlord may charge you a late fee – which can be assessed at 5% of your rent payment or more.

“It’s nice to have the flexibility to charge your rent as an option if you hit a particularly tough month,” says Davis. “If tenants find themselves stretched too thin financially one month, it’s cheaper to charge their rent than let it go late – and it keeps them from falling behind and souring their relationship with their landlord.”

Cons of paying rent with a credit card

While paying with a credit card has its advantages, there are a few drawbacks to consider as well:

Fees

In the event you are responsible for the credit card processing fee, you’re looking at an increase in your monthly obligation. If the value of your credit card rewards doesn’t surpass the fees, you will lose – not gain – money.

To know if it makes financial sense, look at your card’s rewards program and compare its earnings rates to the transaction fees you’ll be charged. If the fee is 2.5% of the transaction, and you’re earning 1.5% in cash back, you’re losing 1% every month. So, for example, you’ll be out $15 for a $1,500 rent payment.

“It may not sound like much, but over time, it adds up,” says Ande Frazier, former editor-in-chief of MyWorth, a financial education media company. “And if money is tight, [it will impact] what you should be spending on, [like] something essential.”

Credit card debt

As convenient as it is to rely on a substantial credit line when you need it, it’s also easy to over-borrow. Elevated interest rates and low payments will put you into a deep hole.

“It’s a vicious cycle,” says Frazier.“ That debt will grow and grow, and the compounding interest will be huge. If you can’t afford your rent, you’re living in the wrong place.”

Credit damage

Credit scores consider the amount of debt you owe and weigh it against the amount you can borrow. If you hit your limit and the balance stays anywhere near it, your scores will sink. Skip payment cycles, and those scores plummet further.

This puts you in a terrible position if you have to move. Almost all landlords check credit reports to see if you’re a low-risk tenant. So, if they see excessive debt and a pattern of missed payments, they may pass you over for tenancy.

See related: How to rent an apartment with bad credit

Final thoughts

In extreme situations, charging your rent and then paying incrementally can keep you in a positive position with your landlord. To avoid credit card debt spiraling out of control, pay as much as you possibly can to the balance each month. When life returns to normal and you want to continue to charge your rent, make sure you always have the money in your checking account to cover the payment when the bill is due.

*All information about the Chase Sapphire Preferred Card, ABOC Platinum Rewards Mastercard, and the Wells Fargo Propel American Express card has been collected independently by CreditCards.com and has not been reviewed by the issuer. 

Source: creditcards.com



How entrepreneurs can protect themselves from credit card fraud

Posted on by Chloe Fowler

The gig economy has led to an explosion of entrepreneurs looking to start their own businesses. In fact, QuickBooks’ 2020 State of the Self-Employed report found 28.4% of U.S. adults identified as self-employed at one point or another during 2019.

One incredibly important aspect of running your own business is security and fraud prevention. Yet, unfortunately, many small business owners underestimate the risk of bad actors and thieves targeting their establishments – whether it be cyberattacks (43% of all data breaches include small businesses, according to a recent Verizon study), cash theft, shoplifting or credit card fraud (an estimated 27% of online sales with merchants were found to be fraudulent transactions in a 2019 American Express survey).

While large businesses typically have hefty budgets to spend on fraud prevention, as a self-employed person or the owner of a small mom-and-pop shop, you may not have a lot of resources at your disposal – especially at the tail end of a global pandemic. However, there are some steps you can take to protect your business from credit card fraud no matter its size and lower the risk of fraud overall.

Protect your point-of-sale (POS) system

“When it comes to point-of-sale fraud, what businesses are most likely to run across is card skimming,” said Jason Glassberg, cybersecurity expert and co-founder of Redmond, Washington-based Casaba Security, in a previous interview.

This could be physical, such as when a chip is inserted into the POS device by a local criminal, or it could be digital, where the POS system is infected with card number-stealing malware. There is also the ever-present threat of card skimmers and shimmers, which are devices that can capture card data from EMV chip cards.

To combat this threat, provide as much physical security to your POS system as possible, Glassberg said.

“That means locking up POS devices during closed hours so they can’t be accessed by anyone except a manager,” he said.

Also, inspect POS devices at least a couple of times a week, “looking for anything out of the ordinary such as loose housing, exposed wire, bulky fitting or anything that seems out of place on the device,” Glassberg noted.

Finally, stay up to date on any software updates to your POS system.

See related: How small businesses can safely store card details

Card-not-present (CNP) fraud occurs when someone fraudulently uses a credit card number online, over the phone or in another manner where they don’t have to show you the physical card. In fact, a study out of Javelin Strategy found that CNP fraud is 81% more likely to occur compared to POS fraud. Further, retailers could lose as much as $130 billion from CNP fraud by 2023.

One of the best things you can do as a business owner to prevent CNP fraud is to require the consumer to have the card verification value (CVV) number for their card, whether the order is placed over the phone or online, said Glassberg. This three or four-digit number can typically be found on the back of the card.

“You can also ask for the ZIP code associated with the card to weed out many of these fraudulent attempts,” Glassberg said.

Also, be on the lookout for potential “friendly fraud,” or credit card chargebacks initiated by customers looking to reverse a charge on their account for fraudulent purposes, in turn hurting the business they purchased from. In genuine circumstances, a customer can dispute a purchase if their bill was incorrect, the item is damaged, etc. For more information on what to do in these situations, consider reading the following expert business credit column on false disputes.

See related:  Can a collector target my business bank account over personal credit card debt?

Get third-party help

According to Keeper Security’s 2019 SMB Cyberthreat Study, 60% of small business owners said they “do not have a cyberattack prevention plan” and 25% “don’t even know where to start with cybersecurity.”

Even if you don’t have money to hire a cybersecurity staff, you don’t have to shoulder all the risk alone. There are companies, such as NoFraud and Signifyd, that specialize in fraud detection to help online merchants identify a possible risk before the sale goes through.

Dave Hermansen, CEO of e-commerce training company Store Coach, depends on such services to give incoming orders a “pass” or “fail” grade based on advanced algorithms, order histories tied to email addresses and other fraud detection methods.

“If an order gets a ‘pass,’ any loss you incur due to fraud is covered by [the fraud detection service],” said Hermansen in a previous interview. “If it is labeled, ‘fail,’ it’s up to you whether or not you want to ship the order – you will not be covered for fraud on those orders.”

Hermansen said his firm immediately cancels and refunds any orders that are marked “fail.”

See related: Retailers will lose billions to online fraud by 2023: Could a new Amex tool help?

Prevent fraud through training

If you have employees, their habits can put your business at risk (especially as many employees have transitioned to a work-from-home environment sans an in-office security team, guaranteed VPN or in-person “phishing 101” lectures). Make sure employees are aware of threats and train them on what to do and what not to do, said Yair Levy, professor of information systems and cybersecurity at Nova Southeastern University, in a previous interview.

How to dispute fraudulent charges on a corporate credit card

Make the move to mobile

As consumers increasingly use their smartphones to shop, there’s a security benefit to small business owners choosing to upgrade their equipment to accept mobile payments.

If you can accept payments from mobile wallets like Samsung Pay, Apple Pay and Google Pay, there is no credit card to be inserted into the payment terminal, which can cut down your risk of fraud, Glassberg said.

Consider cyber insurance – and a vulnerability test

As fraudsters and scammers are constantly changing their tactics and evolving, no business is 100% safe. A cyber insurance policy could save your small business from potential bankruptcy, considering it would pay for legal fees, customer notifications and other costs incurred if you do experience a data breach.

“As an added measure, if you have the means to do so, I would also highly recommend hiring a cybersecurity firm to carry out a ‘penetration test’ of your business network and POS system to see how vulnerable you really are to an attack,” Glassberg said.

An ounce of prevention could not only protect your customers, but it could save your business as well.

See related:  Is your small business protected by cyber insurance? It should be

The bottom line

With the tips provided above, you can take the steps to protect your small business from fraud of all kinds, including credit card fraud, and ensure your information (and that of your patrons) is protected.

Should you ever experience other security threats related to your business (think: if your business credit card is stolen) be sure to contact your credit card issuer immediately, place a hold on the card and file a dispute if necessary; you should be able to easily contact your issuer using the number of the back of the physical credit card.

Source: creditcards.com



Can you buy a money order with a credit card?

Posted on by Chloe Fowler

Money orders offer guaranteed payment of funds upfront for goods and services. Think of a money order like a prepaid check. There isn’t the requisite waiting around for the bank to clear the funds.

Paying via a money order might be a good option for a wide range of scenarios – transactions occurring between two people who don’t know each other too well, an establishment that wants a payment in cash or someone who doesn’t have a checking account but wants to purchase goods or services.

Paying an individual or institution via a money order sounds like a good idea, but what if you want to charge a money order through your credit card? Is this in your best financial interest?

Find out why paying for a money order via a credit card should be a last resort for most individuals.

See related: Can you send money with a credit card?

What is a money order and how does it work?

Money orders essentially work like cash since funds are guaranteed. The only caveat is a specific individual or institution is specified on the money order. Once a money order is purchased, the purchaser must fill out the recipient’s name, the amount and, in certain cases, the buyer’s address and phone number.

“A money order is a paper certificate issued by a government agency or banking institution,” said Steve Weisman, a Massachusetts-based attorney and professor. An individual pays the money order issuer cash to cover the money order plus a small fee.

One of the advantages of using a money order over checks is it “avoids putting bank account numbers or routing numbers on the document,” said Zach Reese, a CPA from Atlanta.

It is a secure way to make a payment, and there is less likelihood of fraud or identity theft associated with checks.

Money orders often have a receipt, so individuals can track if and when a recipient receives payment. It is possible to put a stop payment on a money order, and it is a safer option than sending or mailing cash.

Where can I buy a money order?

Money orders can be purchased from the U.S. Postal Service. Daily, approximately 269,000 money orders are sold at post offices across the country.

In addition, money orders can be purchased from “supermarkets and convenience stores, through checking or savings accounts in banks, credit unions, money transfer shops and payday loan stores,” said John Li of Fig Loans. Money orders usually have a maximum limit of $1,000. Depending on where a money order is purchased, there is a fee associated with the transaction.

Can an individual buy a money order with a credit card?

Yes, but only from a couple of merchants – Western Union and 7-Eleven stores. The U.S. Postal Service and other places will accept only cash, debit cards or traveler’s checks for a money order, according to Chris Panteli, financial expert and small business owner.

If a buyer decides to charge a money order to a credit card, be aware the credit card company may consider a money order purchase to be a cash advance, which has a downside. Significantly more interest is charged on a cash advance than a regular purchase.

See related: How credit card interest works

What are the pros of buying a money order with a credit card?

Financial experts are hard-pressed to identify more than a few positives associated with purchasing a money order via a credit card. If an individual has no other option and chooses to purchase a money order, there are some benefits:

What are the cons of buying a money order with a credit card?

Most experts agree that buying a money order with a credit card isn’t the most cost-effective option for individuals. Michael Sullivan, personal financial consultant at Take Charge America, explains the disadvantages:

One additional disadvantage is “taking cash advances can affect your credit score. So if you’re trying to improve your credit score, don’t even think of using your credit card to buy a money order,” adds Reese.

See related: Do bank overdrafts affect your credit score?

Bottom line

Most experts agree buying a money order through a credit card isn’t the ideal option and should be reserved as a last resort. It is more expensive, it will take longer to pay off your credit card balance, and could damage your financial future by adversely impacting your credit score.

It is possible to buy a money order with a credit card, but you shouldn’t. Your best bet is to pay for the money order in some other way rather than using a credit card to make the purchase.

Source: creditcards.com



Two? Seven? Twenty? How many credit cards should I have?

Posted on by Chloe Fowler

It would be easy to fill up a wallet with just credit cards. A card to maximize airline miles. A card targeted at your favorite hotel chain. A card that gives you cash back on groceries. Even a card that earns you points when you spend at NFL games. So, where to begin? And where to end?

How many credit cards should I have?

The short answer: you should have at least two – ideally each from a different network (Visa, Mastercard, American Express, Discover, etc.) and each offering you different kind of rewards (cash back, miles, rewards points, etc.). How many credit cards is too many? That depends on the individual – you should never have more than you can handle.

Experts say the number of cards one should have varies according to individual and circumstance. “Generally speaking, there is no one perfect number,” said Ethan Dornhelm, a vice president at FICO.

While the number varies by generation, credit score and other factors, the average American has three credit cards and 2.4 retail store cards, according to a 2020 survey by the credit reporting agency Experian.

To ensure a mix of credit cards and keep your credit score climbing, credit expert John Ulzheimer suggests asking yourself two questions about the cards in your wallet:

  1. Do you have cards across more than one network? If you have three cards, but all of them are Mastercards, this could be a problem if you run into a merchant who only takes Visa. An example? Costco only accepts Visa now, though you can use your Mastercard on the wholesaler’s website.
  2. Do you have a low credit card utilization ratio? Your average balances across all your cards for the past 24 months “should represent no more than 10% of your overall credit limit,” Ulzheimer says.

Credit utilization – how much credit you’re using each month, on average, of all the credit available to you from all your cards combined – accounts for 30% of your credit score under FICO’s traditional model.

If you can add another credit card while keeping your overall spending the same, you’ll lower this ratio – and boost your score.

See related: What is a good credit utilization ratio?

Two? Twenty? The answer is personal

That former number sounds about right to John Corcoran, a hotel industry executive in Aspen, Colorado.

He’s got two for personal use – both airline mileage cards – and a third for work. He added the second mileage card solely for the points bonus, and is thinking about dropping it before the $90 annual fee comes due. “I don’t like credit cards,” he said. “I don’t like debt.”

On the other end of the spectrum is Naomi Sachs, an international business executive in San Rafael, California. Sachs estimates she has 20 or 30 cards “sitting in a sock drawer, unused” – generally retail cards she signed up for to lower the cost of a purchase at that store or credit cards she acquired for the points boost.

Sachs is carrying around in her wallet about 10 more cards, of which she uses two or three with regularity. As for cash? Maybe there’s a $20 bill in there somewhere. Debit? “I don’t put anything on debit, ever, ever,” she said.

Instead, she charges strategically, and checks her card balances a few times a week to stay on top of her finances. “I aggressively try to maximize my spend, for almost every single dollar, every single time,” she said.

Credit expert John Ulzheimer suggests two things that can help you determine the number of cards that is right for you. Always keep your overall credit card utilization low, and secure access to more than one credit card network.

While merchants in the U.S. accept the big four card networks – especially Mastercard and Visa, and, to a lesser extent, American Express and Discover – you can still find places where some of them are not accepted. Costco is one example. The warehouse club switched in 2016 from American Express as its card partner to Citi, so now the only card Costco accepts in-store is Visa.

And if you travel abroad, you should pack credit cards from a variety of card networks. While Visa and Mastercard are most universally accepted, and American Express signs are increasingly common in store windows across the globe, you will inevitably wind up in a place that doesn’t accept the type of credit card you have with you.

Beyond those two key elements, Ulzheimer explains, many approaches are valid, so long as they work for you.

See related: How to use your credit card wisely

How many cards should you have if…

Want to get more specific? Here’s a list of some particular situations you may find yourself in, and some experts’ thoughts on how that might affect what kinds of cards, and how many, you may want to carry in your wallet:

You’re new to credit cards, or just recovering from a bankruptcy or other bad credit incident

Start with one card, a secured card if necessary, then add a second card when you can prove to yourself that you are making your payments on time and paying your bill off in full each month, says Netiva Heard, a credit counselor in Chicago.

“It’s a learning period,” she said. “That’s why you start with just one card first, to get adjusted to those good habits.”

You want to take advantage of rewards programs

Cards that don’t offer rewards “are a complete waste of your time,” Heard says. She recommends thinking about what rewards would benefit you the most, and whether you want to pay an annual fee to get them.

Cards that don’t charge an annual fee generally come with lower introductory bonuses than cards that do and may not be as generous with rewards points on day-to-day spending. But be careful that you don’t sign up for more rewards cards than you can manage to juggle.

Heard advises most people to keep no more than three to five credit cards total in their wallets. Ulzheimer said two rewards cards seems like more than enough – one for airline points and one for cash back.

You plan to buy a new house or car soon

You should stick to the number of cards you already have, at least temporarily. Don’t open even one new credit card within at least six months of applying for a so-called installment loan. Opening a new card will lower your score by a few points due to the hard inquiry on your credit, “and you want it to be in the best shape possible when you go out to get that expensive loan,” Ulzheimer said.

That said, he added, installment lenders will pay the most attention to whether you’ve had a mortgage or auto loan before, if you paid it off on time and whether you tend to pay off your bills in general on time.

You want to improve your credit score

This is not a reason to get a new credit card, Ulzheimer said. “Opening a new card can actually backfire,” he said, because it will, at least initially, lower your score.

When you apply for a credit card, the issuer pulls your credit report, which triggers a hard inquiry. A hard inquiry can lower your score by five points, but it only affects your credit score for one year. After two years, the inquiry falls off your credit report. Note that applying for multiple credit cards at once can exacerbate the negative credit score impact of inquiries, at least in the short term.

A new credit card can also reduce your length of credit history, a key credit scoring factor that considers the average age of all your credit accounts. While length of credit history only counts for 15% of your FICO score, the effect can be significant if you only have one or two existing credit accounts.

On the other hand, if your new credit card has a high credit limit and you keep your balance low, the card can eventually boost your credit score by increasing your overall available credit.

debit card, or cash, Ulzheimer said.

If you need to close your credit cards to avoid using them, then do it, but know that every time you close a credit card, it can lower your score, he said – because it may reduce your available credit, thus increasing your aforementioned credit utilization ratio.

Divorce hits women harder financially: Here’s how to survive it

Bottom line

So, whether you have two or 20 cards doesn’t really matter. What’s important is that your cards give you access to more than one network and offer you the rewards that best meet your needs (which can change over your lifetime).

And, of course, you need to be sure you’re not juggling so many cards that you can’t keep track of all the payment due dates The whole point of having two to 20 or more credit cards is earning points or cash back on your everyday spending that you pay off every month. All the while, keep your credit utilization low so that your credit score climbs.

Source: creditcards.com




top