From violin shops to property empires, plenty of businesses have started on a credit card. Most of them have failed – but some of them are thriving a decade or more later. And some of them are Google, Inc.
The pros of using a credit card to fund a startup are obvious: you don’t give up any of your equity to others. You don’t need anyone’s approval. You don’t have to pay interest on loan money that you’re not using.
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Around the world, airlines rake in hundreds of millions of dollars every year charging for everything from a second checked-in bag to printing your boarding pass. Reservation changes in the U.S. alone brought in an extra US$2.38 billion in 2011, for example.
But a select few stand out for continuing to charge extra for paying with a credit card, despite a worldwide attempt to curb the practice and save consumers millions in the process.
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Long gone are the heady days when you could sleep soundly in the knowledge your property portfolio would magically jump in value year on year. So what happens when it stalls or even drops? Is that it for your investment journey because the banks won’t go near you? Your Investment Property asked the experts to find out what you can do when your trip hits a roadblock.
As many property owners have been made painfully aware of in recent years, what goes up can also come down, often with a thud. No-one is denying it’s a tough economic climate but it’s in just these conditions that smart investors see opportunity. Many a fortune has been made in tough times, but how can you get your hands on much-needed money when your own portfolio needs resuscitating?
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Frequent flyer miles are big business: the Economist estimated that frequent flyer miles accumulated just up to 2005 amounted to $14 trillion. At an estimated 1-2 cents value per mile, that’s worth $700 billion – more than ‘all the dollar notes and coins at large’. Criminals in Brazil and Germany are reportedly using frequent flyer miles for cyber crimes and transactions, in one instance selling stolen credit cards for stolen air miles. It’s less liquid than the dollar, but it has become a currency.
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The Reserve Bank of Australia has ruled to cut credit card surcharges earlier this year – which could save consumers an estimated $350 million a year in extra fees. The biggest culprits, however, are resisting the change, saying their extra fees only cover the added costs.
The majority of Australian retailers do not tack on a surcharge on credit card payments – but about a third, or around 100,000 companies, levy an additional 2 to 4 percent of the transaction value. An RBA review found that only 23 per cent of small business tack on a charge, compared to 44 per cent of large retailers. Notorious examples exist as well, such as the 10 per cent surcharge levied on taxi fares paid with credit cards, as well as ‘flat’ fees charged by several airlines which often tack on a surcharge on cheap flights amounting to well over 20 percent of the ticket price. That is all likely to change this year.
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How much does your credit card affect your ability to buy a house or refinance your mortgage? And is it possible to use your credit card to buy a house? This calls for a new blog post about your credit card and the castle you live in … or want to live in.
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New advances in mobile technology have, for better or worse, changed the way consumers go about their everyday lives. Mobile devices enable consumers to keep regular communication with each other through their respective data networks. They likewise enable users to pay bills, play games, take and store photos, shop for various retail goods, manage their schedules, and even keep an eye on their homes and automobiles through Wi-Fi-enabled security cameras. But for all of the things that consumers are able to do with their smart phones, millions are hesitant to link their personal banking accounts to their mobile devices.
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If you are the owner of a platinum status credit card, then you most likely have access to a concierge service – a 24/7 service that is quite literally at your beck and call round the clock, seven days a week. The things is, you may not be using it at all, which is strange considering the range of things they can do for you. Today we’re going to take a look at what is on offer from a credit card concierge service – hopefully it will make you think twice before taking up your own time on tedious tasks like booking tickets.
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Credit card balance transfer deals can help you pay off your whole balance quickly … but only if you choose the right one. In today’s post, our friends at Your Mortgage discuss currently available deals and shed some light on the traps to avoid.
If you have a higher balance ($6,000 or more) and can only afford low repayments, however, they can easily cost you more and some can have a real sting in their tail. The banks have designed the offers to tempt you in with the low rate but hit you with the really high rate while you’re still owing some money.
For this reason, if you think there’s any chance of you not paying off all your debt within the low-rate period, it’s vital to look beyond that introductory rate that’s always in huge fonts on the ads and consider both how many months the low rate lasts and the annual fee. Work out how much you have to repay each month to get to a zero balance before the higher rate kicks in, and then ask yourself whether you can really achieve this.
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Some of the most popular posts to have been published on The Credit Letter are about financial tools that are designed to help individuals and businesses manage their spend. For example, this one about web-based apps has been viewed many thousands of times since being published originally back in 2009. And this post about iPhone money management apps from 2008 has been even more successful. However, there is a problem with many of these apps – they are not designed for use in Australia. Take Mint as an example. This was one of the pioneering personal finance web apps, but it is made in America and although it now has integration with some Canadian banks, it remains primarily designed for the U.S. market. Australians were essentially not given an option.
Pocketbook is a Sydney-based startup that aims to change that. We interviewed Pocketbook’s creators (Alvin Singh and Bosco Tan) about their product and how it can help you. If you haven’t heard about their service, or didn’t even know such tools existed, read on!
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This easy to read eBook will teach you, step by step, how to reduce your credit card debt and eventually be free from it!
David Boyd
Andrew BoydYou are reading The Credit Letter blog where we share money saving tips and general advice about credit card offers. If you would like to contribute an article, click here.
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