Posts Tagged ‘credit cards’

Twitter creator Jack Dorsey may have just revolutionized the credit card industry with a piece of plastic the size of a sugar cube. Called Square, the little device will soon allow anyone — not just businesses — to accept credit card payments on their Apple iPhone or other mobile device.

How it Works

Square works by plugging into your mobile device’s audio-in jack. Run a customer’s credit card through Square’s card reader and it uploads the credit card information to a central database for approval. Receipts can be emailed to customers instantly.

Currently there are only 100 or so Squares in existence, as the company is running a pilot program for the service in Los Angeles, San Francisco, St. Louis and New York. But as Square (the company) starts to ramp up operations, these little plastic devices may soon become ubiquitous, as the limits on accepting credit cards quickly fall away. Most paradigm changing of all: Merchant accounts are completely unnecessary with Square.

Why it Matters

There are certain advantages Square has over the traditional credit card swipe machines and the very infrastructure of credit card administration today.

1. Square is simple to use. All you need at the moment is an iPhone, though soon the Square will work on several mobile communication devices. To use Square to accept a credit card payment, all the merchant or private citizen needs to do is swipe the card and input the dollar amount. The software does the rest, sending the information to the secure Square Web site, which processes the transaction.

2. Square is secure. No information is ever stored on the iPhone, and all data that is transmitted from the iPhone to the Square Web site is heavily encrypted.

3. Square is inexpensive. Even factoring in the cost of the iPhone, vendors will still come out ahead when compared with the cost of credit card swipe machines and credit card merchant accounts. With Square, the device itself is free, while the software may have a minimal cost of around $1. Square — the company — makes its business profitable by taking a small percentage of each transaction.

4. Square is for everyone, not just merchants. Dorsey envisions not only retail outlets, but also individuals using the Square for payments. Owe a friend money? Just enter the information into Square, and the money is on its way. It is also perfect for mobile vendors such as roadside stall keepers, farmers markets and other businesses where a wireless credit card terminal would be too much of an added expense and a traditional credit card terminal impractical.

Square makes everyone capable of accepting credit card payments, and makes it fast, simple, secure and inexpensive while it’s at it.

Eric Fleming

When your credit score has run rampant like an untrained puppy, it needs to be nurtured over time. Your low credit score can be improved when you set a positive personal finance and credit history improvement plan in motion. There are three important factors you need to remember before you tackle your credit score.

The 3 Things:

1. Existing Bills Need Attention

Similar to that puppy mentioned earlier, your existing bills need attention. When a puppy does something he shouldn’t, it’s up to his owner to correct the behavior. Think of the outstanding bills or large credit balances you’re carrying in the same way: they are negative objects standing in your way of moving forward. Unpaid bills are obstacles to improving your credit history, which determines your credit score. Record them using a debts worksheet to help you determine which bills to pay first.

Action: You can take the proper action and pay off existing bills, even if you are struggling to make ends meet. Take a serious and hard look at your budget, including all outgoing and incoming money. If you don’t know where your money goes each month, keep all of your receipts or have a long look at your debit and Visa bill at the end of the month. Keep track of ATM withdrawals as well.

Cutting back on fees is one place where you can start saving yourself some money when you’re struggling with bills and need to tackle your credit score. If you’re being charged late fees, bank fees or ATM fees, make some phone calls and ask to have the fees waived.

Make small minimum payments, work out payment plans with creditors, and reduce the number of times you use fee-based ATMs or fee-based payment services to pay your utility bills. Find a bank that has free checking and does not charge you to bank the way you want, whether it’s with paper checks or paying bills online.

Find a way to earn extra income, or cut back on existing expenses — these are the only ways to “find” more money in your existing budget.

2. You Need to Use Credit

Before you scratch your head, thinking that fictional puppy shared some fleas with you, consider that in order to build your credit score you need to use credit. Avoiding credit cards will not help you improve your credit history or your credit score. This is not an invitation to rack up large balances on your AmEx or Discover cards.

Use and Pay - The most beneficial way for you to use credit cards to improve your credit score is to use credit cards to make small occasional purchases, keeping the balance to an amount you can pay off completely each month. This is not the same as carrying a balance. Carrying a balance costs you more money because you are paying finance charges. Using the card and paying it off on time will improve your credit score over time.

One or Two Cards Only - Another responsible way to use credit is to use only one or two credit cards and keep your purchases below your credit limit. Unless you have an urgent bill or need to travel suddenly, there is no reason to max out a credit card. Maxing out your MasterCard will make it more difficult to pay off the balance at the end of the month, and to stay within your set budget.

3. Have Patience

Just as you wouldn’t expect our fictional puppy to learn everything he needs to know overnight, your credit score also needs some time to grow and develop. As long as you stick to your budget and use credit wisely and within your monthly means, you will be able to improve your credit score over time.

Pam Gaulin

By all outward appearances, Neal Caffrey of USA Network’s “White Collar” is the guy every man wants to be and every woman wants to date. He’s smart, sexy and he’s a snappy dresser with a quick wit. Unfortunately, he’s a con artist, and not even a good one at that. He’s an art forger on loan to the FBI for the remainder of his prison sentence, and the GPS tracker on his ankle isn’t there for decoration.

He was busted twice by the same FBI agent, Peter Burke, and now he has to help Burke take down white collar criminals like himself. Caffrey is allotted $700 per month for housing, which, in Manhattan, barely covers a roach-infested flop house. True to form, Caffrey charms an old widow into letting him live in the guest room of her downtown mansion and she also outfits him with her late husband’s expensive wardrobe. Within 24 hours of his conditional release from prison, Neal Caffrey looks like a Wall Street fat cat - and has the address to back it up.

There is no doubt that he is a talented forger, and his reputation precedes him in a number of Burke’s cases. However, Caffrey was busted forging stock certificates, which shows very poor judgment. It’s true that a signed stock certificate is as liquid as cash, but every stock certificate contains a CUSIP number, and the company’s transfer agent would spot the fake CUSIP number as soon as the certificate was deposited.

Caffrey’s personal finances suggest the illusion of wealth and the reality of poverty. The one clue he possesses in the disappearance of his girlfriend is a vintage Bordeaux bottle they kept throughout their relationship. A number of Bordeaux wines make up the most expensive in France, with Petrus routinely fetching more than $1,000 a bottle. Unfortunately for Caffrey, his bottle is as empty as the promise he made to his girlfriend to fill it with the good stuff when he finally made a big score. He was forced to fill the bottle over and over again with boxed wine and, upon chemical analysis, his cohort Mozzie pronounced the last wine to inhabit the bottle was “a lovely Franzia from last October.”

Caffrey is clever, and he provides Burke insight into the criminal mind. Normally a by-the-book FBI agent, Burke nonetheless values Caffrey’s ability to close cases by coloring outside the lines. Caffrey’s way with the ladies comes in handy as well, and Burke comes to him for marital advice from time to time. Burke makes about $87,000 per year as an FBI agent, so that’s something for Caffrey to consider when thinking about career moves. Failing that, the average marriage counselor makes $43,210 per year and doesn’t face criminal charges for solving a couple’s problems.

If Caffrey is successful in solving the mystery of his disappearing girlfriend, however, he might consider a career as a private investigator. Top private investigators make around $60,000 per year, and Caffrey would certainly be at the top of that game.

Most likely, though, he’ll go back to being a con artist when he is released. Among the most common cons these days are identity theft and credit card fraud. That is why it is important to protect your identity and credit card accounts.

Guys like Neal Caffrey are out there, and they’re not all handsome rogues with a quick wit and a sly smile. Some are hardcore criminals who never stop to consider the damage they cause to the lives of their victims.

And you can bet none of them are helping the FBI to catch bad guys.

Dave Guilford

Click to read part 1 of 5 Tips to Increase Your Credit Score

When it comes to money management, there is plenty of talk about adopting a cash-only philosophy. Unfortunately, this really only serves a purpose for debt management/reduction. In the case of credit repair, which typically is the next step after all debts are managed or eliminated, a cash-only lifestyle will do nothing for your credit. If you want to repair or increase your credit score, you must use credit. The trick, however, is how you use credit to increase your credit score.

#3: Pay Debts on Time

Consistently paying your debts on time will do wonders for increasing your score. In fact, payment history accounts for about 35 percent of your credit score. One of the easiest ways to make sure you pay your debts on time is to enroll in automatic bill pay with your lenders and credit card company. You can also set up recurring payments through your checking account via online banking.

#4: A Tenth is All You Need

Just having a credit card alone is not enough to increase your credit score — you have to use it. With the economy the way it is, many banks are adopting the practice of closing dormant accounts. So, in other words, if you don’t use it, you lose it. But, the key to this is to use your credit card wisely. Set a maximum spending target of 10 percent of your available credit.

Each month make a purchase on your credit card(s). Use the card for a night out featuring dinner and a movie or fill up your car’s gas tank using your credit card once a month. Don’t use your cards for big ticket items like a plasma screen TV. Just be sure to keep your purchases under 10 percent of your available credit and you should be able to either pay off your balance each month and on time.

#5: Diversity is Key

Spread your debt out by diversifying how you use and manage it. Begin paying down loans by increasing your loan payments a little each month. If you have more than one credit card, distribute the 10 percent target across all cards. For instance, if you have three credit cards, strive to use at maximum 3 percent of the available balance on each so that you stay under the 10 percent cap you placed for yourself.

These tips will help repair and increase your credit score significantly over time. Just remember not to use credit, don’t overextend it (10 percent is key) and diversify your debt usage. Making the required payments on time every month along with these three things will boost your score. Be patient, because credit repair and increasing your credit score does not occur overnight — you have to stick to it. These changes will hopefully become a lifestyle change for your spending that will keep your credit in good standing permanently.

ShawnTe Pierce

He’s an FBI agent living in Los Angeles and at the center of an investigation that has captured the attention of the world at large. Mark Benford of “Flash Forward” has enough on his plate without spending time worrying about pinching pennies. But does this father and recovering alcoholic make enough money to support a pricey West Coast lifestyle?

Who is Mark Benford?

Mark Benford is the husband of Olivia and father of Charlie. Mark is an FBI agent and a recovering alcoholic, both of which play large roles in his day-to-day life. He and his family live in Los Angeles, Calif., though his work has shown him jet-setting across the globe as he tries to make sense of an event that caused the entire world to fall asleep simultaneously.

How much money does Flash Forward’s Mark Benford make?

As an FBI agent with roughly 15 to 20 years of experience (based on his age), Mark likely makes approximately $75,000-120,000 a year, according to Payscale’s career profile. The show gives little to no evidence of credit card or financial struggles for the Benford family, though statistically, alcoholics have a high risk of financial trouble.

In addition to Mark’s salary, his wife Olivia has a high-profile career as a trauma surgeon, where she may make a salary of $300,000 a year, according to the Salary Wizard. With their incomes combined, therefore, the Benford family may bring in around $400,000 a year, substantially higher than the national average.

How much does it cost to live in Los Angeles?

It isn’t cheap to live in Los Angeles. According to City-Data’s comprehensive look at the region, the average income is just under $50,000 a year, the average cost of a single family home like the Benford’s is $670,000 and the cost of living is 162 (very high), whereas the average cost of living in the United States is 100. As such, Mark would be able to survive on his own, but his wife’s salary is the real boon that keeps his family afloat.

Assuming, though, that Mark and Olivia Benford have no outstanding debt or financial troubles, it’s reasonable to assume that they’d be doing quite well for themselves in Los Angeles compared to other residents. With no credit card debt that we know of and secure jobs, even with childcare for their daughter and a high cost of living, Benford just may be able to make his salary (combined with that of his successful wife) stretch far enough to make it!

Kelly Herdrich

When managing your finances to get out of debt, using credit or applying for new credit is not a wise decision. Face it — if you are struggling to pay your bills on time or even pay them at all, acquiring a new bill will place you further into debt. Not to mention the fact that it will further damage your credit score in the process. However, once your finances are in order, you can begin increasing your credit score by using your debt and credit cards wisely.

#1: Transfer Credit Card Debt

If you have outstanding credit card debt and are in the processing of fixing your personal finance so you can adequately pay your bills, transferring this debt is an option you should look into. Ideally you would want to transfer your credit card debt into an installment loan. Do not confuse installment loans with lines of credit, such as home equity lines of credit and secured lines of credit. These two types of credit are revolving debt, the same form of debt as credit cards, and may pose the same repayment issues your credit card caused you. (Also see Balance Transfer Pitfalls.)

Typically installment loans have a lower interest rate than your credit card. These loans tend to be secured debt, which means something you own is used as collateral with the financial institution in case you fail to repay your obligation. You can also obtain an unsecured installment loan; however, the interest will be much higher than the secured loan. With both secured and unsecured installment loans, you know what you need to pay each month based upon the repayment schedule you are given.

#2: Obtain a Credit Card

Using an existing credit card or obtaining a new credit card will put you on a faster track to increasing your score. In fact, obtaining one of the big four credit cards will make a huge difference. If you do not know what the big four are, they are the four major credit cards virtually every retailer accepts: American Express, Discover, MasterCard and Visa.

In addition to having a credit card by one of the big four, it is best to have one that is unsecured. However, if your credit is bad, you may only qualify for a secured credit card. With a secured card your limit is determined by the amount you deposit into the account. Most secured credit cards require a minimum deposit of $200.00. If you only qualify for a secured credit card, make sure it reports monthly to Experian, Equifax and TransUnion. Another matter to check into for secured credit cards is to make sure they will convert to an unsecured card within 18 months of regular timely payments.

These are the first steps to helping you repair your credit and increase your credit score. Just remember to get your finances under control first, and make use of installment loans to aid you. Then make the transition to getting a credit card or to begin using the card(s) you already have to increase your credit score.

Click to read part 2 of 5 Tips to Increase Your Credit Score

ShawnTe Pierce

According to MSN MoneyCentral, FICO has finally revealed information on how they calculate penalties…sort of. For years, people have wondered exactly how FICO figures out scores. Now they can get a better idea, but of course FICO is not going to reveal their whole process.

The information from MoneyCentral states that a person with good credit may get penalized more than a person with a bad credit score for the same offense. For instance, MoneyCentral shows a graph with FICO reports stating that a person with a score of 680 who maxes out a credit card gets penalized in the range of 10 to 30 points. In this same graph, a person with a score of 780 would get penalized 25 to 45 points.

For a bankruptcy, the person with the higher score of 780 could get up to 240 points deducted from his or her credit score, quickly transforming the great credit score to one that is not so good, at 540. In turn, the person with a 680 score could get a deduction of up to 150 points, leaving him with a credit score of 530.

Possible translation of this is that people with the higher scores get deducted more because they should know better. However, number logic and other factors may say different. Those with higher scores likely also have more credit cards, possibly more vehicles, a larger home and so on.

The other thing to remember is that even people with the same credit score may have completely different credit situations. One may have a large number of credit accounts, while another may not. There are many different credit situations because not everyone will have the same circumstances. That’s why there’s such a range and also probably the reason that FICO does not fully reveal everything about how they factor credit scores. However, looking at the above scenarios can certainly be helpful in determining what possible penalties may be faced in certain credit situations.

Lyn Lomasi

For Bella Swan, the main character in Stephenie Meyer’s “Twilight” series and the recently released “New Moon” movie, money and the problems it can cause are a reality. In fact, before she meets handsome and wealthy vampire Edward Cullen, Bella and her divorced parents Charlie and Renee don’t have the luxury of spending frivolously. Concerns about daily expenses, college tuition and retirement are very real for the Swans. Could these Twilight stars have made ends meet raising a daughter on the salaries of a teacher and a sheriff?

What were Bella’s finances like when she lived with her mother?

Charlie and his wife, Renee, divorced when Bella was a baby. He remained in the small town of Forks, Washington, while his ex-wife and daughter moved to Arizona. According to Phoenix Home Zone, the cost of living in Phoenix is higher than the national average, and Bella’s mother would have made approximately $41,000 a year as a teacher, based on data from Simply Hired.

While we know little about Bella and Renee’s financial situation, readers do learn that Bella’s mother, a teacher, and Bella were on a tight budget. We also know that Renee was a free-spirit who was always trying something new–from yoga classes to different churches. This knowledge, based on the cost of living and her salary, leads readers to believe that Bella and her mother may have had some debt, credit card or otherwise.

What was Charlie’s financial situation when Bella moved in?

When Bella moved to live with her father, Charlie, in Forks, Washington, her financial situation may have improved some. According to Simply Hired, the average small town sheriff job in Forks, Washington pays approximately $34,000. When he sent child support to his wife and daughter in Phoenix, he was probably on a tight budget. When Bella moved in, however, his finances likely improved some. Considering the substantially lower cost of living in Forks (almost 20 percent less than the national average according to Simply Hired), Bella and her father may have been able to live a debt-free, though simple, life

In addition, readers and viewers never see Charlie or Bella as big spenders. Content to save their pennies and eat out at a local diner once a week, the Swans probably had little to no credit card debt.

What about college for Bella and retirement for Charlie?

Readers know that the college situation was a prickly one for Bella and her father. Bella had some money put away for college, but expressed concerns about taking too much from her parents and hindering their retirement. Luckily, Bella was content with a less expensive university in Alaska, and later considered Dartmouth, paid for by her wealthier husband.

Though Twilight reads as a bit of fiction and fantasy, there’s nothing fictional about the financial situation that author Stephenie Meyer paints. The Swans were, for the most part, able to keep their credit card debt down with their conservative spending habits, and as a result, are one of the few fictional families in books and movies that provide a good example for real life folks.

Kelly Herdrich

One has to wonder if fictional fry cook SpongeBob makes enough to live the life he does. SpongeBob did, after all, exchange vows with his squirrel love, Sandy (more about that on “Truth or Square“, November 6th). But since she’s a land-based, oxygen breathing squirrel, Sandy lives separately in her own glassed-in home. Could SpongeBob really own a house on his own? Let’s take a closer look at SpongeBob’s finances.

SpongeBob works at the Krusty Krab as a fry cook. The average fast food worker earns minimum wage or slightly more per hour. Let’s say for the sake of this article that SpongeBob makes $8 per hour. If he does work full-time, that’s $1,280 per month before taxes. But, whether or not SpongeBob actually works full-time is unknown. Not only does SpongeBob work at the Krusty Krab, but he also attends boating school, which means he more than likely works part-time.

One thing to remember is SpongeBob had his house before he started working at the Krusty Krab. This means that his house may have already been paid for. If this was the case, SpongeBob could easily live on $1,280 per month, especially when you consider that most fast food workers get free meals while on the job and meals at a discount when they aren’t on duty. Of course, this would depend on whether or not Mr. Krabs, who is incredibly cheap, would allow such benefits.

What about credit cards? Does SpongeBob use them? There is one episode in which he is asked to purchase a gift for Mr. Krab’s daughter, Pearl. Mr. Krab’s gives SpongeBob his credit card and SpongeBob wonders what it is. He’s fascinated to find out that you can purchase items with a piece of plastic. Truthfully, this is how most people feel when they first learn about credit cards.

SpongeBob is financially responsible, though. He has both a checking and savings account. He even saves up his money to spend on the things he wants, which is a great lesson to teach children. SpongeBob is also known to blow his paycheck on frivolous things, though, but who doesn’t from time to time?

Chances are SpongeBob really could live the life he does on a fry cook’s paycheck. It’s really not that far-fetched. In fact, according to the Bureau of Labor Statistics, around 2.5 million workers are in the food preparation and serving field, which includes fast food workers. In other words, thousands of people are making a living doing exactly what SpongeBob does.

Amy Brantley

Living in Miami can be expensive, especially if you’ve been burned. Just ask Michael Westen, a disgraced spy living in Miami and trapped there by his “Burn Notice” (USA Network).

Life on Easy Street

Before he was sold out by someone more powerful than he, Michael Westen was an international field agent - presumably for the CIA. Based on his level of technical proficiency and the sensitivity of the jobs he was given, it is safe to assume he made a nice living. The base pay for a top non-supervisory field agent is around $79,000 annually, and with Miami locality pay, the number increases to $98,000. That buys a lot of Cuban sandwiches.

But base pay is only part of the picture. As a jet-setting international man of espionage, Westen had access to a nearly unlimited expense account. On-scene weapons procurement, bribes and elaborate escape plans all require serious capital. Not to mention any “bonuses” he may have earned by neutralizing a particularly troubling target. All in all, he was sitting pretty.

Feel the Burn

After escaping death when his cover is blown, Westen was dumped in Miami, where he grew up. It was there he discovered just how bad a burn notice could be. No job, no identity, no social security number, no credit or personal history and a frozen bank account.

He managed to find a loft above a bar in a seedy part of town. Based on current rental information, a loft in Miami like Westen’s rents for around $800 per month. He grabbed his father’s old muscle car for wheels, so he saved some money there. But paying off the right people to find out how and why he was burned costs money, so Westen has to take a few “odd jobs” off the books.

Like any business, Westen’s requires start-up capital. For openers, a Sig Sauer P226R 9mm pistol (the gun preferred by special ops guys the world over) retails for $1,200. Given the current shortage of ammunition, Speer Gold-Dot Hollow Point 9mm rounds are selling for $1.50 each. Multiply that by 5,000 or so and, well, you get the picture.

Westen runs with a sketchy crowd, too. There’s Sam, a former SEAL turned FBI informant who is a bit of a shlub, but who always manages to come through for Michael whether he needs inside information or a good trigger man. There’s his on-again, off-again girlfriend Fiona, an ex-IRA assassin and demolitions expert who never met a mercury detonator she didn’t like. His brother Nate is a born con man. And his friend Barry is an international money launderer and identity thief.

Identity theft is actually Westen’s stock-in-trade. In the variety of assignments he accepts, he always impersonates someone else, sometimes with full credentials provided by Barry the money launderer. While he is always a good guy, Westen illustrates just how easy it is to have your identity compromised and why it is a good idea to take the necessary steps to avoid identity theft.

By helping the right people out, Westen manages to make enough money (all cash, of course) to keep yogurt in the fridge for himself, beer on ice for Sam and miles of detonation cord for Fiona. Though he’s trying desperately to get back in the good graces of his former employer, he may discover that the security of a government paycheck might not equal the freedom and profitability of freelance spy work.

Dave Guilford