Credit Card Land

Your credit card is stolen. You place a phone call to the number provided in your tourist guide or in the local daily press. You provide your details and you cancel your card. You block it. In a few minutes, it should be transferred to the stop-list available to the authorization centres worldwide. From that moment on, no thief will be able to fraudulently use your card. You can sigh in relief. The danger is over.

But is it ?

It is definitely not. To understand why, we should first review the intricate procedure involved.

In principle, the best and safest thing to do is call the authorization centre of the bank that issued your card (the issuer bank). Calling the number published in the media is second best because it connects the cardholder to a "volunteer" bank, which caters for the needs of all the issuers of a given card. Some service organizations (such as IAPA - the International Air Passengers Association) provide a similar service.

The "catering bank" accepts the call, notes down the details of the cardholder and prepares a fax containing the instruction to cancel the card. The cancellation fax is then sent on to the issuing bank. The details of all the issuing banks are found in special manuals published by the clearing and payments associations of all the banks that issue a specific card. All the financial institutions that issue Mastercards, Eurocards and a few other more minor cards in Europe are members of Europay International (EPI). Here lies the first snag : the catering bank often mistakes the identity of the issuer. Many banks share the same name or are branches of a network. Banks with identical names can exist in Prague, Budapest and Frankfurt, or Vienna, for instance. Should a fax cancelling the card be sent to the wrong bank - the card will simply not be cancelled until it is too late. By the time the mistake is discovered, the card is usually thoroughly abused and the financial means of the cardholder are exhausted.

Additionally, going the indirect route (calling an intermediary bank instead of the issuing bank) translates into a delay which could prove monetarily crucial. By the time the fax is sent, it might be no longer necessary.

If the card has been abused and fraudulent purchases or money withdrawals have been debited to the unfortunate cardholders' bank or credit card account - the cardholder can reclaim these charges. He has to clearly identify them and state in writing that they were not effected by him. A process called "chargeback" thus is set in motion.

A chargeback is a transaction disputed within the payment system. A dispute can be initiated by the cardholder when he receives his statement and rejects one or more items on it or when an issuing financial institution disputes a transaction for a technical reason (usually at the behest of the cardholder or if his account is overdrawn). A technical reason could be the wrong or no signature, wrong or no date, important details missing in the sales vouchers and so on. Despite the warnings carried on many a sales voucher ("No Refund - No Cancellation") both refunds and cancellations are daily occurrences.

To be considered a chargeback, the card issuer must initiate a well-defined dispute procedure. This it can do only after it has determined the reasons invalidating the transaction. A chrageback can only be initiated by the issuing financial institution. The cardholder himself has no standing in this matter and the chargeback rules and regulations are not accessible to him. He is confined to lodging a complaint with the issuer. This is an abnormal situation whereby rules affecting the balances and mandating operations resulting in debits and credits in the bank account are not available to the account name (owner). The issuer, at its discretion, may decide that issuing a chargeback is the best way to rectify the complaint.

The following sequence of events is, thus, fairly common :

1. The cardholder presents his card to a merchant (aka : an acceptor of payment system cards).

2. The merchant may request an authorization for the transaction, either by electronic means (a Point of Sale / Electronic Fund Transfer apparatus) or by phone (voice authorization). A merchant is obliged to do so if the value of the transaction exceeds predefined thresholds. But there are other cases in which this might be either a required or a recommended policy.

3. If the transaction is authorized, the merchant notes down the authorization reference number and gives the goods and services to the cardholder. In a face-to-face transaction (as opposed to a phone or internet/electronic transaction), the merchant must request the cardholder to sign the sale slip. He must then compare the signature provided by the cardholder to the signature specimen at the back of the card. A mismatch of the signatures (or their absence either on the card or on the slip) invalidate the transaction. The merchant will then provide the cardholder with a receipt, normally with a copy of the signed voucher.

4. Periodically, the merchant collects all the transaction vouchers and sends them to his bank (the "acquiring" bank).

5. The acquiring bank pays the merchant on foot of the transaction vouchers minus the commission payable to the credit card company. Some banks pre-finance or re-finance credit card sales vouchers in the form of credit lines (cash flow or receivables financing).

6. The acquiring bank sends the transaction to the payments system (VISA International or Europay International) through its connection to the relevant network (VisaNet, in the case of Visa, for instance).

7. The credit card company (Visa, Mastercard, Diners Club) credits the acquirer bank.

8. The credit card company sends the transaction to the issuing bank and automatically debits the issuer.

9. The issuing bank debits the cardholder's account. It issues monthly or transaction related statements to the cardholder.

10. The cardholder pays the issuing bank on foot of the statement (this is automatic, involuntary debiting of the cardholders account with the bank).

Some credit card companies in some territories prefer to work directly with the cardholders. In such a case, they issue a monthly statement, which the cardholder has to pay directly to them by money order or by bank transfer. The cardholder will be required to provide a security to the credit card company and his spending limits will be tightly related to the level and quality of the security provided by him. The very issuance of the card is almost always subject to credit history and to an approval process in Europe. Unfortunately, the same cannot be said about credit card issuers in the USA. This lackadaisical vigilance, the monpolistic practices of certain credit card companies, the Kafkaesque procedures and the arbitrariness of the results - put both merchants and credit card holders at risk. Whatever it is that credit card companies provide - it is not guaranteed payment or secure refunds.

Information about how online credit card processing works

So you are a merchant with a website and you wish to process credit cards online because you are aware that credit card processing is the most convenient and most common mode of payment on the internet. Well, first of all, besides your website or online store you need to have a merchant account provider, engage the issuer of the credit cards that you plan to accept as payment, and use the payment gateway services.

Let's see what actually happens when credit card payments are accepted online.

Now, in order to sell your goods online, you, the merchant, need to have a merchant account and a payment gateway account. When a customer visits your website and decides to buy something he will type in his particular credit card details. The billing information and order details are immediately dispatched to the payment gateway secure server by the online store administrator where they are processed and then sent to the merchant's acquiring bank. The bank then sends the information to the bank that has issued the credit card in order to get the transaction verified.

Once the verification is made the payment will be either approved or rejected. This response is then forwarded to the merchant's acquiring bank by the credit card issuing bank and the bank then forwards these transaction details to the payment gateway. If a payment has met with approval, the payment will be deposited into the merchant's account. The details are then sent back to the website or online store. Then the same information is then presented to the customer, and he is informed that his credit card was charged. If a payment has not met with approval, it will be rejected or denied and the customer will be informed of this, too.

Although this sounds as if it is a lengthy process it is streamlined and takes only a few seconds to be performed.

How much a merchant account and a payment gateway costs can be different depending upon the provider. Of course, you will be expected to pay a one-time set up fee, and you may also be obliged to pay a discount rate for each payment, as well as a minimal fee for each transaction. Again, fees could also be charged on the transaction total, at various processing stages of an online payment. All this normally adds up to but two to three percent of the total charges.

Practically all experienced webmasters all over the world realize the value of online credit card processing and use it to their advantage as it helps to optimize their business. Why don't you join them?

Does Credit Card Fraud Alert Protect Us?

Nowadays more and more people face the problem of identity theft. How can you realize that you are a victim of identity theft and what can you do to solve this problem? If your credit card statement includes charges for things you never bought, or you get a call (letter), informing that you have been approved or denied credit for accounts that you never applied for, then you are a victim of identity theft. Identity theft means that someone uses your personal identifying information, like your Social Security number, or credit card number, without asking you, to commit fraud. If you are a victim of identity theft, you are to put a fraud alert on your credit reports and review them. A fraud alert is something that credit bureaus attach to your credit report. First of all, you are to speak to the fraud department of one of the main credit bureaus (Transunion, Equifax, and Experian) to place a fraud alert on your credit file, plus a victim's statement asking that creditors call you before granting credit or other services. Victim statements may cause delays in getting credit while the creditors try to contact you. When you open a credit account by getting a new credit card, the lender will contact you to make sure that you really want to open a new account. Fraud alerts help to prevent an identity thief from opening new accounts in your name. When the credit bureau proves your fraud alert, it will contact the other two. So they will place an alert on their versions of your report, too. If you are not asked, the credit account wouldn't be opened. It should be mentioned that it's up to you what kind of fraud alert to choose. If you have chosen initial alert, it will remain on your credit reports for 90 days. While the alert is on your file, perhaps you won't be able to get instant credit. When you file an alert, you will be eligible for a free credit report from each of the three credit reporting agencies. As far as extended fraud alert is concerned, it will remain on your credit file for seven years. However, you can ask to remove the fraud alert before seven-year period run out. The only thing you need is to make this request in writing and provide information to confirm your identity. These procedures are planned to prevent criminals from removing fraud alerts from victims' accounts. A fraud alert provides some protection against identity theft, but not in all cases. It will not help you when an identity thief uses your existing credit cards or other accounts. And it will not help you when an identity thief opens new accounts in your name that do not require credit check. So, identity theft is very serious. Many victims of identity theft spend much money and time repairing damage to their good name and credit score.

Best Business Credit Cards For Small Business

Obtaining one of the best business credit cards available for your small business is an important part of securing the financial future of your business. There are numerous credit card lenders offering cards for small business, in the hopes of providing a means to help finance your small business. The benefits of using these cards are numerous. Locating the best business credit card for your needs first requires an assessment of what essential features that you'll need your card to provide.

Qualifications Are First Step

The first step in getting the best business credit cards is qualifying for them. As with all lines of credit, the same things are important with these credit cards. Look for offers that provide low finance charges and generous credit limits. If you are just starting out, your business is likely to need your personal credit history in order to vouch for your creditworthiness when securing these lines of credit. The best business credit card for your business, then, is the one that allows you the most flexibility, the lowest financing charges and the highest limit available to you.

Bookkeeping Made Simple

One of the benefits of securing the a business credit card is obtaining the ability to consolidate and manage your expenses on one or several cards. For example, if you have a business credit line, you can make payments to all your business expenses through that credit line. At the end of the month, you receive a statement which provides line items of every expenditure that you have made. You can see who you paid, how much you paid and not have to worry about how much money is in the current account throughout the process. The best business credit cards will offer the capability of downloading your statements online. This type of feature can really simplify bookkeeping.

Giving You Back Something

Some of the best business credit cards are those that give you cash back or other rewards. If you need to do a lot of traveling, then securing a card that offers frequent flyer miles can be beneficial by providing a return on investment for your spending with a specific card. Some lines of credit will offer you alternatives when redeeming your rewards -- air miles or cash back rewards, for example. Simply put, when you use your card, you earn points for every purchase. The best business credit card offers will allow you to earn additional points or a premium for purchases of business-related expenses. When utilizing a business credit card rewards program, you should keep your day to day purchases separate from your business purchases in order to simplify your accounting process. You should use a separate rewards card for your personal expense items, if you want to take advantage of earning rewards on those items. Nevertheless, every business can benefit from the intelligent use of solid business credit card and its corresponding rewards program.

Adding Capital

Perhaps the most important reason to find the best business credit card is that it will provide much needed flexibility for your short-term working capital requirements. In other words, you'll have credit available to you when you need it, helping you ease the burden of any short-term cash flow restrictions. For those that wish to earn something back or just want an easy way to manage their expenses, business credit cards, when used judiciously, are certainly a viable option for any small business owner.

Simple Steps to Improving your Credit Score Quickly

It seems like everything you do financially somehow always involves credit scores. They are everywhere. However, if you're not looking for a loan or applying for a credit card, is your credit score still that important? The answer to this question is a resounding yes. You never know when you'll need a good rating some day. It may even help you get a job in some instances.

Still not sure what your credit score actually is? Well, it is a rating given to you by banks measuring the likelihood you'll repay what you owe. Getting a good credit score isn't always easy, especially when you're starting off with a bad one. It takes time, patience, and persistence. The best way to ensure a good score is to responsibly manage your credit. If you pay your bills on time and keep your card balances low over the long haul, you'll be rewarded with a solid score.

Here are a few easy ways you can quickly improve your credit score:

• A good idea is to first find out your credit score; then know how they work. You want higher numbers since they are the best, while lower numbers mean bad credit. The highest score is an 850 and 300 is lowest you can score. Contact a credit bureau or agency to find your score. They'll usually do this through an introductory credit report.

• Look over your new credit report. If there are any errors on it, mark them down with an explanation about each. The credit bureau who ran your report and investigate those errors.
• More importantly than any item on this list, you need to pay all of your bills on time. Nothing harms your credit score more than late payments as well as prompting creditors to raise interest rates.
• Contact your credit card companies to inquire about credit reporting dates. These are when the credit card companies report data on payments to the credit reporting agencies. Your creditors can possibly change the due date to a few days earlier than the reporting date. This helps to make your balance appear to always be at its lowest level. Your credit score will increase in no time with this tactic.
• Find out if your credit card companies can raise your limits. By doing so, the credit card companies helps your ratio to be less than 30 percent. For example, let's say your card limit is $10,000 and you owe $7000. See if the company will increase your limit to 25,000. This makes your less than 30 percent and raises your credit score substantively.
  

• Finally, it is a good idea to understand credit card ratios. Always know what you owe for each account on a monthly basis and then figure out 30 percent of that total. The balance should always be be less than this figure. If you have a balance below that all important 30 percent mark your credit rating will improve.

Tips : How To Open A Credit Card Merchant Account

In this day and age of electronic commerce, the decision to open a credit card merchant account is relatively undisputed. The actual process of opening an account should begin with the retailer identifying certain key parameters about the retailer trade the merchant requires the merchant account for. The selection of an appropriate vendor for the merchant account should be the first step in the cycle, which is usually followed by an application on a prescribed form. If and when approved, certain information and documentation such as financial statements will need to be furnished to the merchant account provider. One approved, the provider will supply the equipment or in case it is an online merchant account, the retailer's website will need to embed the merchant account software in the e-commerce website and integrate the shopping card software supplied by the merchant account provider.

Selecting a merchant account provider should take into account the volume and value of proposed transactions, nature of business, history and track record and identification of specific needs, if any apply, of the retailer. The volume of transactions and nature of business proposed to be conducted via the merchant account will have a significant bearing on the available options to choose from. For instance, if a retailer expects a high volume of transactions, a merchant account for that specific purpose will need to be obtained, which frequently fall in the high risk category. Such high risk businesses may not be able to obtain a merchant account onshore, and may need to opt for an offshore merchant account. The history and track record with a merchant account may come into question in case of a domestic account provider. In case a retailer is unable to meet certain basic requirements, for instance, if a retailer has been in business (online) for less than 2 years, the merchant account provider may ask for a cash bond (as indemnity) along with a business plan, which will further need to be approved.

In addition to choosing between an offshore or onshore provider (which in some cases may not present a choice), an e-tailer will be well advised to do some extensive number crunching when choosing a merchant account provider. Today, there is available, an extensive list of provider to choose from, with varying fees, minimum requirements and transaction fees. While intense competition has caused many providers to lower their fee structures, a merchant must beware of hidden fees and charges that may not be presented initially by providers offering 'ZERO SETUP FEE!' and similar catch phrases to capture attention.

The actual application process begins with filling in an online form (in case of internet merchant account) or a physical form, available through your local bank, in the case of a domestic merchant account. Many offshore account providers can be located by simply searching the internet. The application form is then screened by the merchant account provider, in order to assess feasibility, primarily from a risk point of view. As mentioned before, a high risk vendor will probably be out of favor for a domestic provider without the furnishing of a substantial indemnity bond. The provider will then approach the merchant for further documentation. Such documentation will mostly include:

* Registration certificate, incorporation certificate, memorandum and articles of association (in case the retailer is incorporated), partnership deed (in case of partnership) and other organizational material.

* Details about the directors or partners including name, place of domicile (with proof), contact information, etc.

* Identification proof of the directors, managing partners.

* Business plan and financial documentation.

* Full history with a previous merchant account along with detailed information about chargebacks.

In addition to the submitted information, the merchant account provider will typically conduct its own background checks including a credit history and rating verification, as well as a detailed analysis of the retailer's proposed business model and revenue potential. Assuming that all is satisfactory, the provider will obtain an approval from an acquirer bank that it has a relationship with (many big banks have their own acquirer bank units). Once approved, the retailer will have to purchase a credit card terminal and in many cases, a dedicated telephone line for processing needs. In case an internet merchant account is applied for, the software is the key to operations. While many merchant account providers have their own shopping cart software, they also provide a compatibility list of 3rd party software. Such 3rd party solutions are often favored by retailers due to the usability, features and ease of management.

A final point to be noted in case of an offshore merchant account- while it is possible to go directly offshore, set up and incorporate a company in a foreign land, and do the necessary paperwork yourself, it may be more convenient and practical to approach a third party merchant account provider such as Stradafee, which specialize in providing merchant accounts and have the necessary infrastructure in place to make the whole process even easier.

Applying for Credit

Applying for Credit,Applying For A Credit Card With No Credit History

Oddly enough, not only will bad credit work against you when applying for a loan or a credit card, but no credit will too. Even though this doesn't seem fair, it is the way things work in the complicated world of consumer credit. Lenders are leery about opening accounts for people with no credit history because they simply have nothing to base your reliability on.

So, if you can't build a credit history without credit and you can't get credit without a credit history, just what has a person to do? It's nearly impossible to rent a car, stay in a hotel, or shop online without a credit card, so let's explore a few of the options that can eliminate this Catch-2

Available Credit Options

Although many of the major credit card companies won't give you a card without a credit history, some smaller ones, like department stores, will. Find a department store that will issue you a card and apply for it. You can try getting a gas station card also. Either way, use your card but be sure to make all payments on time. Your goal is to build a good credit history, not just get a credit card.

Find a credit card company that will review your overall financial situation and not just your credit history. Some lenders will look at your employment history, your housing situation, and how often you have moved. If this is all on the up and up, they may approve your application. Again, use this card wisely.

Credit Unions

If you are a credit union member, or are eligible for membership, see what their card issuing terms are. Although they are no giving out cards with their eyes closed, they will often have more relaxed conditions for members. You no longer have to work for a specific company to be eligible to join a credit union. So it's well worth checking if there's one in your area.

Secured Credit Cards

Secured credit cards are offered by lenders who will give you a line of credit that either matches, or is slightly higher than, a cash deposit that you give them to hold. As your experience with the card grows, these lenders will often raise your limit without requiring you to increase your deposit. Eventually, you can use your experience with this lender to apply for cards that are not secured.

Student Credit Cards

If you are a student, then you'll be best off with a student credit card. Student credit cards can be a great way of building the credit history that you will need to depend upon after graduation. The important thing here is to remember to use that opportunity wisely. Many banks will issue college students a credit card, especially banks that are located in college or university cities and towns.

When you do manage to get a credit card, remember that you are establishing a credit history. Show that you are a good financial risk by paying the bill on time. Don't go crazy with the spending. It will only cause you problems in the future.