Online Financial Tips

Archive for January, 2012

Debit card issuance is rising in the United States, according to both Visa and Mastercard. Visa reported a 16.5% increase in debit card issuance last year; Mastercard says debit card issuance rose 10.5% in the same period. Not surprisingly, both credit card associations also reported a substantial dip in credit card transactions and an increase in debit card transactions.

What does this mean to you, the merchant? Well, with more debit cards coming into use, you will see an increase in the number of your own customers that will present a debit card for payment at the register, versus a credit card.

In today’s economy many people have maxed out their credit cards or have damaged their credit and can’t qualify for an actual credit card. Then there is the growing sector known as “The Unbanked”, individuals who are not in the banking system, either by choice or due to credit problems. These people often carry pre-paid debit cards purchased at check cashing stores, etc. They load cash onto the cards and use them just like any bank-issued debit card. The cards carry either the Visa or Mastercard hologram.

Debit cardholders may elect to have you swipe their card as either debit, requiring the customer to enter their Personal Identification Number (PIN), or have you swipe their card as “credit”.

Most merchant normally actually ask the customer, “Debit or credit?” This is not the way to save yourself money on transaction processing costs. As most merchants know, the cost is much less to process a transaction as debit than credit. Debit transactions do not run through the Visa or Mastercard interchange network, and thus bypass their fees. A typical credit card transaction might cost a merchant 1.6% and 20 cents transaction fee. To process that same transaction as a debit, the cost is typically 0.7% and 30 cents. The difference will average roughly $100 savings per $10,000 in sales. ( In this example, 1.6% would represent a transaction at the lowest tier, known as Qualified. If the card has rewards, such as cash back or airline miles, it would run as Mid-qualified at around 2.7% or more. A business or corporate or foreign card at 4% or more.)

So why would you leave the choice of processing to the customer? They don’t care, trust me. What you should be doing every time you take a debit card is swiping it as debit and presenting the PIN keypad to the customer so they can enter their PIN. If you ever get a customer who for some odd reason really prefers to run the transaction as credit, just hit your cancel button and re-swipe as credit. Some pre-paid debit cards do carry a transaction fee to the cardholder for credit swipe transactions and I have met people who incorrectly believed their bank would charge them a fee for a PIN debit transaction.

Being proactive like this can save you thousands of dollars a year, and with debit card use on the rise, processing debit cards properly will become ever more critical.

What’s that you say? You don’t have a PIN keypad? Well, contact your account executive with your merchant processor and order one today. They cost anywhere from $100 to $300 and are often available refurbished.

Many credit card terminals actually have a PIN pad function built in, the customer enters their PIN directly on your terminal keyboard. Check if your terminal does this.

One final remark about the savings by processing a debit card as debit versus credit. Depending upon what your merchant services provider (MSP) is charging you for debit card PIN-based transaction versus credit card, there is a price point below which you may save money by choosing to swipe a debit card as a credit card. Example: You sell ice cream cones. Average sale ticket is $10 for a family’s purchase. To process as a PIN-based debit, the cost to you will be .70% plus 30 cents. That comes out to 7 cents and 30 cents= 37 cents to process as debit. As a credit sale it would be 1.6% and perhaps 15 cents so that comes out to 16 cents plus 15 cents = 31 cents. 6 cents lower that a PIN-based debit sale. Not a big difference for one sale, but multiplied out to a month’s sales volume it amounts to a bit of money you might be wasting. You will have to run your own numbers depending on your own processing costs.

What’s that you say? You don’t know exactly what you are paying to process plastic? Well, you need to find out!

My own company, the merchant services provider for whom I am an account executive, offers a free analysis of your recent merchant account statement. We break down what you pay for all three tiers of credit cards (known as Qualified, Mid-qualified and Non-qualified) as well as the various monthly fees that may be tacked on, and we the, side by side, show you what we propose to charge and what your bottom-line savings could be by switching your merchant processing to us. All in one neat and easy-to-read page. Free. I have looked at many merchant account monthly statements in my time and most can be very confusing to the customer.

We are entering a cashless era in society and the ability to take electronic payments – credit and debit cards, gift and loyalty cards, electronic check processing and more – is a crucial aspect of running your business, and managing the associated costs is just good business.

Pre-Paid legal Services, Inc. is a service network of more than 50 independent law firms in the US and Canada that aim in providing affordable legal services by charging a monthly, semi-annual or annual insurance plan. Once you register with Pre-paid, you gain access to all the established network of attorneys when needed. Benefits include free document reviews, Will preparation, discounts off regular hourly rates and the first 30 minutes of legal advice from an attorney is free. A great feature also included is the Identity Theft Shield which is responsible for monitoring any attempts of identity fraud to your personal information.

Pre-paid advertises by means of a multi-level marketing (MLM) structure and is the only legal service in North America that uses MLM. How it works is for a $49 fee you become an independent distributor. This gives you the rights to market the service plan to others. When you begin selling the idea of Pre-paid Legal Services, Inc., you make commissions based on volume of sales. You also make money by signing up sales reps in your downline and make additional commissions based on you teams cumulative sales volume. Pre-paid’s compensation plan offers advancement incentives as well as “persistency levels” that are used in calculating ones income based on member retention. Also, you are given a company discount when personally using the services you market.

Pre-paid Legal was established in 1972 so its track record has proved that it can stand the test of time. Prepaid Legal Services is worth the money, but you must be very discipline and dedicated if you wish to create significant income as a sales rep. It is definitely worth the money if you plan on just using the legal services.

Pre-paid reported to the SEC in 2005 that under 25% of sales reps sold more than one insurance plan. This means that if you wish to make it big in this MLM, you will have to recruit a team of solid sales reps to generate the volume necessary to see some nice numbers. It is all a numbers game so expect to recruit thousands of people in order to achieve a respectable income.

We all know how important it is to have insurance, whether it is car insurance, health insurance or even life insurance. Did you ever think about legal insurance? Well, that is what Prepaid Legal Services provide.

Harland C. Stonecipher started these services in 1969. He was in an auto accident that left him with huge legal bills. That is when he started searching for any legal defense plans in European legal industry. That is when he found the Sportsman’s Motor Club that offered legal expense reimbursement services as part of their motor club. He decided to start these services and began marketing in 1983. Now the company is in 50 states and Canada. And they market strictly through a network marketing system.

What does Prepaid Legal Services offer? They market legal service plans. They have a network of law firms over the US and Canada. The customer purchases a type of legal insurance that connects them with a law firm in their area. They receive legal services such as document preparation; unlimited attorney consults over the phone, and will preparation, traffic violation defense problems, general trial defense and criminal defense for auto related charges. They also offer identity theft services that can be added to the customer’s package.

This is a program that has a direct sales compensation plan. An Independent Associate will be able to make $50 to 182.50 on every $26 membership sold. When the Independent Associate markets 5 memberships per week, he or she is made a Senior Associate. At that level, the earnings will be $500 per week.

Prepaid Legal Services provide “hands on” experience in how to present the membership with others and help them to see the opportunity in sharing it with others. It works very simply.

1. You will first show the Prepaid Legal Services plan.

2. Sign them up

3. Mail the enrollment form to corporate office to be processed

4. Get paid

As soon as the membership packet is received at the main office, then a commission check is deposited right into your bank account. If you submit new business daily, you get paid daily.

What sets this apart from other direct sales marketing plans is the “daily pay” plans. Commissions, overrides and bonuses are paid on a daily basis. When an associate makes a; $26 membership sale, the company pays out a total of $245.50. The reason they do this is because most members stay with the company over the years.

Building your business is the best way to insure a great income for you if you decide to be a part of this company. When you have 3 legs beneath you and 75 sales, you reach the top level of Executive Director. If you only had 30 associates in your group sell one membership per week, assuming a one-year commission advance, you would be able to earn $975 per week. This is if everyone that purchases a membership stay in the program.

To get started will only be $49. This will include your sales materials; you’re training in the field, Support from your team, support from the Home Office through the Marketing Services Team, access to marketing supplies and online associate services.

Do your research on the Prepaid Legal Services before you decide. Think about how you will find your leads, your marketing plan. Do more in depth research on the marketing plan. Network marketing has statistics of 90% failure rate. Don’t be a part of that 90%.

With our world becoming increasingly dangerous, it only makes sense to make prevention as a top priority. As health insurance becomes popular with employees, prepaid legal plans are making the transition from the office to the telephone.

What are prepaid legal plans? A prepaid legal plan is a type of arrangement where the person pays or an employer pays on behalf of his employees for legal services they may need in advance. Think of it as a medical benefit plan or any prepaid service. A consumer pays certain amount monthly or annually for specific legal services that can be used when and if needed.

Why the need for a prepaid legal service? Although it is expected for every citizen to know their rights, most of us only refer to them when we are in trouble. So unless you have a personal or family lawyer, a prepaid legal plan is your best defense against anything that has to do with the law.

Depending on your chosen prepaid legal plan, the legal services that are available to you may be limited. Any basic prepaid legal plan may include office consultations, legal advice and review and preparation of some legal documents such as a will or contract. More comprehensive prepaid legal services can cover trials, bankruptcy, settling marital disputes and the like.

Is it worth it to own a prepaid legal plan? Well, with America having dozens of legal cases filed on their courts everyday and people becoming more conscious of their legal right, it pays to be cautious. Prevention is better than the cure. When people understand their rights under the law, they can avoid turning minor problems from exploding out of proportions.

A lot of prepaid legal services have made it easier for plan owners to contact them through the telephone. This not only makes the lawyers accessible to the prepaid legal plan owners but it also makes them more at ease with asking legal advice.

A prepaid legal service clearly benefits its owner because it takes away the hassle of having to mistakenly choose a bad lawyer to an honest one. Often, the companies who offer prepaid legal plans screen their lawyers before hiring them, making sure that you get value for your investment.

There are two types of prepaid legal plan available to consumers. The first is the basic access plan for employees. This is where a member can easily access legal services through the telephone.

Although the package offers a limited number of services, the member can be assured of making better decisions with the proper legal consultation from a lawyer. Should a member from this plan need services beyond what is included in the package, they have to pay additional fees.

The second type is the comprehensive prepaid legal plan. Aside from the consultation services, a comprehensive plan has member can receive employer-funded benefits which includes negotiations with parties, preparing legal documents and representation in court. Some companies offer legal service coverage for families too.

We live in a world where the law has a firm hand in everything. Knowing that you have ability to get legal advice before doing anything consequential is a great way to avoid a lot of trouble on the courts. A prepaid legal plan may very well be one of the best decisions you’ll ever make for you and your family.

Corporate credit is essential for many new businesses and for those that are currently operating. Businesses with a good loan score can qualify for higher business loans, vendor loan and corporate credit cards without personal guarantee. Most small businesses, unless they have an established line of business credit, often link their personal and business accounts together. A personal guarantee is often required for business credit cards, loans and some vendor accounts when a business is new, without established trust in future payment or has a low credit rate.

Businesses without established surplus cash will have to use the owner’s personal credit score when it comes to applying for credit cards or loans. Business owners with a low FICO score that apply for a credit card or loan may be approved with a low extension line or at times even denied loan. For owners with bad assets, obtaining any kind of business capital outlay is nearly impossible. In order to create a financially fit business, emphasis must be placed on building business credit. Business loan is based on a Paydex score, which is similar to the FICO score used in personal loan. The Paydex score takes into account the number of revolving accounts and whether they are paid on time or defaulted. Late payments and defaulted accounts negatively affect a business’s credit.

In order to obtain an extension for a business should start out by applying for an Employer Identification Number or tax ID number. This a clear separation from personal social security number of the owner and that of the business and officially makes it a separate entity of its own. It also allows a business owner to then use the EIN number for the business to establish surplus cash lines. Once an tax ID number is obtained, the next step is to establish a few small lines of loans to help build up a good Paydex score.

One thing to keep in mind is that paying debts on time does not improve your loan points if the creditors do not regularly report the payments and account status to the capital outlay bureaus. Make sure that the vendor or bank that supplies the business assets reports the account to the capital outlay bureaus including Equifax, Experian and Dun & Bradstreet. One or all of these companies are used by credit card and loan companies when reviewing a business loan application. By establishing several revolving accounts and keeping them current, a business can greatly improve its extension rate. With a good Paydex score, a business can easily obtain credit cards and loans with having to personally guarantee the loans. Eligibility will be based solely on the extension score of the business.