The Finance Blogger


Credit Card Cash Advances Expensive

September 21st, 2015 ernie Posted in Credit Cards 2 Comments »

Credit Card Cash Advances ExpensiveCredit Card Cash Advances Expensive for consumers in a number of ways. The costs are sometimes are hidden until you get your statement. If you cannot pay the total balance at that time, the credit card cash advance can get even more expensive. They charge you interest for the cash advance. They also charge interest on any purchases that are on your card as well. You really can get quite a surprise when you receive your credit card statement. This is when you find that you have another large charge for interest that is now due. We will look at these fees in a little more detail. We will not review specific credit cards, because there are just too many. When you are considering a credit card account look at each of these areas. Make your decision on a particular card that fits your needs and plans for using the card.

Credit Card Cash Advances Expensive

High interest rate – many credit cards carry a rate from 19% to as high as 29%. Which compared to a personal loan or mortgage is extremely expensive.

Cash advance fee – Some accounts will also charge you a fee for taking cash from your credit card account. This is in addition to charging interest immediately on the day of the advance.

Interest charges begin immediately – interest charges begin immediately on the day of the advance. This will also trigger interest on any unpaid balance on your statement even though you are still in the grace period.

Better to charge the item to your card – if you charge the item to your card instead of taking a cash advance, you at least have until the item appears on your statement to pay for it without interest being charged.

Credit card checks sometimes treated as cash advances – even those checks that credit card companies send out can be treated as cash advances and trigger immediate interest charges.

Read the fine print before taking advantage of any cash advance on any credit card so that you know what you are getting into and what it is going to cost you.

For many more posts about dealing with credit cards, click here.

 

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Credit Card Annual Fee

October 21st, 2014 ernie Posted in Credit Cards No Comments »

Credit Card Annual FeeWould you pay a credit card annual fee for a credit card that gives you a number of benefits. I guess it depends on what those benefits are and whether you can actually use them or not. The writer just terminated one credit card account because it was costing $120 per year and I was not even using the card. Sure it gave me car insurance when I rented a car, health benefits for travel and purchase insurance on items that I might purchase, but if you do not use the card, then it is definitely not worth while to keep the card and continue paying the annual fee in our opinion.

So we ditched the card and now use another credit card with no annual fee that provides us with travel points which is what we are really looking for. The point is to assess the benefits, can you use them and what does it cost you to get this card.

Credit Card Annual Fee Can Be Worthwhile

Regardless of what the fee is, it is the benefits that are valuable. They are usually more valuable than the annual cost, if you use them. For example, if you rent a lot of cars and your credit card includes rental car insurance, you can save far more than the cost of the credit card. Another example is insurance for some of the things you purchase using your credit card. A friend bought an iPhone using his credit card. After the warranty was finished from Apple, his phone stopped working.

Fortunately his credit card purchase insurance paid for a new card saving him a great deal of money and paying him far more than the annual fee. Another popular benefit is cash from points that can be used to buy trips, pay for hotels and airfare. If you use these features then it can be quite valuable.

Another example is a credit card that gives you points towards a hotel chain. Marriott, Hilton and Holiday Inn all do this along with others. If you travel and stay in hotels a lot, this might be something that would be interesting. With one card we looked at they charged you $120 per year, but then gave you a coupon for one free night a year.

That pretty well pays for the annual fee and we will use this annual certificate for sure. Depends on your life style and what is valuable to you and your family!

For more thoughts and ideas about credit card use, click here.

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Get a Credit Card Today

September 7th, 2014 ernie Posted in Credit Cards No Comments »

Get a Credit Card TodayIt is so easy to get a credit card today, with limited credit worthiness, low credit ratings and sometimes even with bad credit. You would almost think that these sales people are selling credit cards are on a commission. They seem to get paid by the number of new customers they sign up. This occurs regardless of the client and their ability to pay the balance at the end of the month. As consumers we get pre-approved credit card applications in the mail every week. At stores and banks we are offered credit card applications. We can usually be approved on the spot. We once purchased new appliances, were asked if we wanted to take out a credit card to pay for them. As an incentive, they offered $100 off the price of the purchased items.

We obviously said yes and were approved within a few minutes, no questions asked. They did not tell us that the interest rate on unpaid balances were 29%. But it did not matter to us. We had the money to purchase the appliances in the first place. We just paid it off when the monthly statement arrived.

Get a Credit Card Today – Watch Your Credit Rating

With all of these credit card products available it can be tempting. It can be actually fairly easy to end up with many credit cards. What consumers may not realize is that having all of these cards actually means you can incur a great deal of debt.

The credit rating agencies will lower your rating correspondingly because of your exposure whether you use them or not. Next time you apply for a loan or a mortgage for example, there is a chance you could be turned down due to a poor credit rating which comes as a surprise to many people.

If you have a lot of credit cards due to various reasons, you may want to close the accounts to protect your credit rating. It could take up to a year for the credit card to come off of your credit report. So take this into account if you are applying for a mortgage or a loan of some kind in the future.

For more details about credit cards, click here.

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Protect your Credit Card

July 7th, 2014 ernie Posted in Credit Cards No Comments »

Protect your Credit CardMany people have had their credit card number stolen and know how it feels to have your privacy invaded. We all need to protect our credit cards to avoid this invasion of privacy. We can avoid expensive hits to our bank accounts as well. Most credit card companies will cover your losses if your card is stolen and charges mount up. However you also suffer the loss of your card at the same time. Consumers are unable to use it until a new one is sent to you. There are at least seven different ways to protect your credit card. Follow these steps to avoid the invasion of privacy and the frustration of having to cancel your account.

Ways to Protect your Credit Card

Don’t Give Out Your Digits to Just Anyone

Never give out your credit card number over the phone unless you are 100% confident of who you are dealing with, especially where someone has called you. They could be scam artists looking for credit card numbers.

Make Friends With the Shredder

Shred everything that has your name and account number on it. Thieves have been known to go through peoples mail to find credit card account information

Say No to Password Storage

Keep all of your passwords in a safe place. We are not supposed to write them down, but there are just too many. Saving them in the cloud makes it easy for hackers to get at them. Save them locally.

Review Those Statements

Go over your statement in detail to review and avoid any charges that are not yours. Thieves love to charge small amounts on cards to test them and to go under the radar.

Check Your Address

Always confirm your address on your account statements.

Sign Up for Text Alerts

Both text alerts and email alerts can let you know when charges above a specified limit are charged to your card. This is an excellent method of keeping tabs on your account automatically.

Don’t Delay in Reporting

Report your unknown charges immediately. If you wait too long, the credit card company may dispute some of the charges which you could them become liable for.

Protect your Credit Card by following these steps and paying attention to the details about what is being charged to your account.

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No Annual Fee Credit Card

October 21st, 2013 ernie Posted in Credit Cards No Comments »

No Annual Fee Credit CardSome credit cards will charge at low annual fee for the privilege of carrying their card. This fee that the charge is typically $100 per year.These credits cards also provide a number of services that you will not find on another cards. For example car insurance, travel insurance, points that you can use when they accumulate to pay for trips and other goods that you purchase.

These cards can be quite valuable based on the services that they provide. However if you do not use the services and are still paying the annual fee charged by these cards then this is an additional cost that many people should try not to pay for.

Evaluate Your Credit Card Benefits

If you travel a great deal and avoid having to purchase travel insurance, additional car insurance, and other types of services that are provided on this card then the annual fee can be quite valuable. If on the other hand you do not use these services then the annual fee is just another fee and that you are not getting any value from.

No Annual Fee Credit Card

Some of these credit cards that charge an annual fee, also provide low interest-rate loans based on the unpaid balance. Again one has to check to make sure that the Interest rate is competitive with a personal loan to make it worthwhile.

If the credit card that you have is charging you $100 a year just to use it as an annual fee, some people might feel that it is worthwhile just to have that card with you in case you need it. They think of it as an insurance policy in case they have a large purchase that they need to place on it. While this can be a worthwhile reason, it still comes down to the question, Are you receiving your money’s worth from this credit card.

One way to look at it is whether you will receive $100 in benefits of some kind each year. If you are at least using these benefits in whatever form the are, then it is probably a good idea to keep the card, other wise it is time to get rid of it and save yourself $100 a year. Another benefit of getting rid of the credit card and by getting rid of it we mean close the account is that your credit rating will also improve. This is one less potential debt that is not listed against your name and will improve your overall credit rating.

Something to think about. For more information about the use of credit cards, click here.

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Lowest Rate Credit Card

October 7th, 2013 ernie Posted in Credit Cards No Comments »

Lowest Rate Credit CardMany credit cards advertise themselves as being the lowest rate credit cards available. The sad reality is that after the grace period of sometimes three months or longer six months. Most credit cards end up charging the 21.9% rate that is the average of the industry. This is very expensive for many people particularly if they carry a balance on the credit card. Store based credit cards charge even more than 21%, with some as high as 29%! If you carry a balance past your statement due date, the interest charges begin immediately from the day you charged items to your card that have not been paid. Be careful always pay on time to avoid interest and a poor credit rating.

Lowest Rate Credit Card – Credit Card Marketing

Credit cards have a great number of marketing advertising opportunities that they provide to the customers. One of them is low interest-rates for the initial., Particularly when you transfer balances from other credit cards or other loans. This amount will be charged a small or low interest-rate for a short period of time.

Once this grace period is over, the credit card reverts to the normal high interest-rate for unpaid balances at the end of the month. Many consumers find to their surprise that when they make a monthly payment, the majority of the payment is going towards paying the interest particularly if they pay the minimum amount that it’s included or offered on the statement.

Advice for Low Interest Credit Cards

The best advice for when you sign up for a low interest credit card, is to get in the habit of paying the full balance at the end of the month to avoid all interest charges that may accumulate on an unpaid balance. If you can follow this particular strategy your costs for borrowing money will be a great deal lower and the cost of your goods that you purchase will also be much lower as well.

Credit cards are convenient, however they can also get us all in trouble when we use them too much and then cannot repay the balance at the end of the month or on your statement due date. Another excellent approach to take is to limit yourself to a maximum of three credit cards. This generally will make it easier to pay of balance when there are three cards or less to deal with. Also artificially keep the limit on the cards to a minimum to avoid any temptation to charge then up to a high level.

If you can follow these rules, many consumers can keep the debt level at reasonably levels. For more details about sing credit cards, click here.

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Credit Card Debt

June 7th, 2013 Debt Posted in Credit Cards No Comments »

Credit Card DebtCredit card debt is probably one of the most expensive kinds of debt that most people will deal with in their lives. Credit card debt carries a high interest rate that can really rack up huge cost quickly if you are not careful. Cards such as Visa and MasterCard usually carry an interest rate of approximately 18% to 19%. Store based credit cards are much more expensive and carry rates as high as 28% to 29%. With rates as high as these customers will have a difficult time and it will take a long time to repay credit card debt if you only pay the minimum each month.

What to do About Credit Card Debt

The best approach to credit card debt is to first of all pay your balance off on the due date. Never carry and unpaid balance past the due date. If you do, interest will be charged from the date that your items were first charged to the card. This may be a surprise to many users, however that is the way most credit card companies calculate interest charges. When this occurs many clients are very surprised at the amount of interest and how little of their payment actually goes towards paying off the principle. All additional charges are also factored into the calculations as well and the interest charges can become almost overwhelming.

If you cannot pay your credit card debt off at the end of the month on the due date using your own sources of funds, then the next best thing is to arrange for a low-interest personal loan and consolidate all of your credit card debt into the personal loan. You will still be paying interest charges, but it will be under 10% at today’s rates instead of being up in the high teens or high twenties. Once you consolidate your credit card debt with a low-interest personal loan, the next step is to get control of how you use your credit cards. Always make sure that you read the fine print and understand what the APR is for your loan. Some less than scrupulous lenders are charging upwards of 300% on loans. Car title loans are among the worst and consumers should stay clear of these types of loans.

Budget Your Money and Avoid Debt

If you do not have the cash, we suggest that you should not spend the money. If you do not have the cash this will mean that you will have an unpaid balance at the end of the month. An unpaid balance means paying high interest rates again.

Focus on repaying the personal loan you used to pay down your credit card debt. Avoid using your credit cards as much as you can. The cost for credit card debt is just too high. The real danger is that consumers will build up their credit card debt yet again. They still have to repay the personal loan they took out previously. Now what do they do when they have exhausted their credit limits?

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Lowest Rate Credit Cards

May 7th, 2013 ernie Posted in Credit Cards No Comments »

Lowest Rate Credit CardsThere are so many credit card products on the market these days; it is very difficult to know which ones are the lowest rate credit cards. They all offer various features and benefits that many people find very attractive. There are the credit cards that are aimed at the mass market. They have the usual high interest rate and a number of benefits that appeal to many consumers. Then there are credit cards that are aimed at specific segments of the market. These are people who might want to collect airline points for example or people who like the idea of having insurance on everything they purchase along with car and travel insurance when they use their cards to pay for those items.

After many years of using credit cards ourselves and looking at the various products that are on the market, we have come to the conclusion that different cards really do make sense for various people based on what they want out of their cards. It is not always the lowest rate credit card that always makes sense for everyone. Some consumers really can utilize many of the benefits that come with credit cards that are offered by the many banks.

Lowest Rate Credit Cards – Good Intentions

Let’s face it, when you first get a credit card, you have good intentions. It will only be used for emergencies and for those times when you do not have the cash handy on you. You plan to always pay the balance in full every month to avoid interest charges on the unpaid balance. This was certainly our objective and plan when we got our first credit card. We were not even that interested in what the interest rate was because we had plans to always pay the unpaid balance every month.

Well that seems to work 90% of the time. There are occasions when we just do not have the money and we need to carry a balance over the end of the month. Suddenly we are very aware of what that interest rate is and how important it is to pay it off as quickly as possible. This is what got us started at looking at credit cards and what they cost. We also started including the benefits of the cards as well to see if that made a difference.

Get Back to Basics with Credit Cards

With all of the products that available, we decided that it is better to get back to basics and focus on the lowest cost credit cards.  First of all there should never be an annual fee for using the card. Secondly you want to find a card with the absolute lowest interest rate just in case you do have an unpaid balance. This is really the best place to start. You will likely have a number of cards that fit this category.

Next, most consumers will want to now compare many of the benefits. Whether it is points towards airfare, goods that you can purchase, insurance for rental cars, insurance on things that you purchase, health insurance while you travel, they all have value to some consumers. The situation is with these cards is that there is usually a cost to these cards and now the big decision. Will you make sufficient use from these cards and the points to offset the additional cost of a card that offers benefits.

Lowest Rate Credit Cards – Use the Benefits

Based on my personal experience, we use all of the benefits that are listed in the previous paragraph, however unfortunately for us, we really do not use them often enough to make it worthwhile. If the added cost of the card with benefits is around $100, then you really need to make sure that you get $100 in benefits that you actually use every year. Some years we have received much more than that while in other years we do not even come close.

Bottom line for us is that the lowest rate credit card is really a card that has the lowest rate and the benefits are free. Be prepared to spend some time shopping around to find the best deal for you.

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Merchant Credit Card

March 21st, 2013 ernie Posted in Credit Cards 1 Comment »

There is hardly a business today that does not have the need for a merchant credit card. Most business transactions that are done today with their customers are either debit or credit card transaction. If you do not have offer this service you run the risk of losing business. Long gone are the days when people carried enough cash around to pay for whatever they purchased. Checks are also not generally used any longer. Besides there is too much opportunity for fraud with people trying to pass bad checks. Small business operators all the way up to large business must have the means to accept business credit card transactions today.

Merchant Credit Card – How are the Fees Determined

This service is typically offered by a number of financial institutions. There are various levels of fees that may be charged.  Before we get into the fee’s, the service you purchase will usually be for a defined term up to three years in length. They may have cancellation charges if you decide to opt out of your contract before it is completed. Be careful of the credit card companies that claim to offer to no cancellation fee. It is usually somewhere in the fine print that many people do not bother to read.

The fees that are charged are also based on the number of transactions you expect to process each month. Also the amount of money that is anticipated to be processed  and your company’s credit rating. Volume of transactions can affect the amount of processing needed and communications required. Support for fraudulent transactions etc are usually a percent of total transactions and also the type of business that you are in.

Amount of Transactions and the Average Size of the Transactions

Large transactions with a small number of transactions will be treated differently than a large number of transactions and a large amount of money being processed. Providing an accurate estimate of the number and type of transactions will have an impact on the fees that you will eventually pay. The company’s credit rating or your credit rating in the case of a sole proprietor also will impact the fees that the financial institution decides to charge.

Type of Business

Sometimes even the type of business that is applying for a business credit card service will affect the fees. Different businesses have different reputations for fraud, for numbers of transactions and size of those transactions. All of this is taken into account prior to the final fees for your merchant credit card account being finalized.

What are the Fees for a Merchant Credit Card Service

First there  can be an application fee from $0 to around $500 that is charged all customers. Next there are statement fees that are charged for printing or making a soft copy to send to the merchant. Usually there is a transaction fee that is calculated per item based on a fixed rate or a percentage of the amount up to some agreed to maximum per transaction. There can also be a fixed or variable cost per month for these services whether you use them or not.

Business owners should compare several services that offer merchant credit card accounts. Then select the one that makes the most sense for their business. The number of transactions per month, the fixed fees, the variable fees and the fees that are considered a minimum amount unless some threshold is achieved.

Not all merchant accounts are the same. They do not all charge the same amount. Sometimes you may have noticed that some businesses will not accept certain credit cards for example. This is due to the fact these cards charge the merchant too high a fee for processing a customer purchase through this particular card. It can be very frustrating to learn that the item you wanted to buy cannot be bought since the store owner will not accept your card.

Consider all of these issues before you make your decision. Review which merchant credit card service to utilize and always ask your bank for a negotiated discount to the fees.

For many more posts about managing credit cards, click here.

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Lower Interest Credit Card

March 7th, 2013 ernie Posted in Credit Cards 1 Comment »

Lower Interest Credit CardThere are lots of low interest credit cards available on the market. However consumers need to pay attention to the fine print. They need to make sure that these low interest rates remain in effect for a reasonable period of time. Also hat there are no hidden charges to be aware of. There are many credit cards that will offer low interest rates for a specified period of time. They revert to the regular rates. Some cards will offer 0% interest rates on any balances that are transferred from other sources for up to 10 months. Then the interest rate on any Lower Interest Credit Card unpaid balance goes up to 18%. If there are any charges during that time that go unpaid this amount is also at the 18% rate. Only the transferred amount will be interest free.

If you manage your credit card debt carefully, consumers can actually take advantage of these lower credit card rates and avoid paying interest on the balances. The trick is to make sure that there is no unpaid balance at the end of the month that could trigger an interest charge. The fees and charges seem to fall into several categories for debts that are transferred from other accounts

  •        Zero Interest, Zero Annual Fee
  •        Low Interest, Annual Fee
  •        High Interest , No Annual Fee

Some will charge regular 18% interest on any charges for goods and services to the card if you do not pay the balance of these charges at the end of each month. There always seems to be a catch to many of these lower interest rate cards and consumers need to really examine the details before they begin to use them.

Regular Lower Interest Credit Card

In addition to low interest rates on money transfer from other debt credit cards, some cards truly do qualify as low interest rate cards. The typical store credit card is usually at 27 or 28% interest rates. Regular bank credit cards will range around 17% to 19%. There are credit cards that offer their products at much lower rates. At the time of writing these low interest rate cards were ranging around 11% for unpaid balances. This is a very low rate for any credit card product. There is usually one catch which can change this rate depending on how much you use the card and what unpaid balance you carry.

These cards will charge an annual fee for their card from $30 up to as much as $100 a year. This is an effective interest rate charge, however it is very difficult to calculate the effective interest rate.

Features, Insurance and Other Services

In some cases these additional fees may well be worth it to some consumers. For example if you travel a great deal and charge the trip costs to this card, you may be covered for health insurance, trip insurance, car rental insurance and build up points that can be used for purchases. These points can be used to buy products from a catalog or they can be used to pay for trips, airfare, hotels and rental cars. Depending again on your use of the credit card these points can be very valuable to many consumers, paying for many products and services.

Credit Rating Requirements on Lower Interest Rate Credit Card

Consumers who want to be approved for one of these cards usually must have good to excellent credit ratings. If you want one of the lower interest cards, your credit rating should usually be in the excellent range. Of course it never hurts to ask. Sometimes people will be approved even with poor credit ratings allowing them to reduce their overall interest costs and save a great deal of money.

There are so many credit cards it is difficult to know which one is best for every reader. Our advice is to list all of the features. Then decide if these features will benefit you. Compare to your current credit card that is being used by your family. If there is not an improvement, then do not bother with the credit card product. Holding a lot of credit cards may cause your credit rating to drop as well. Be careful before you decide to amass a lot of credit cards in your wallet.

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Lowest Interest Credit Card

February 21st, 2013 ernie Posted in Credit Cards 1 Comment »

Lowest Interest Credit CardFinding the lowest interest rate credit card can be complicated since there are so many factors to consider. They make it this way sometimes to confuse us as consumers. Yet if you do a little homework you can quickly pick out the deals that make sense for your particular situation. The credit card companies are trying to cater to everyone’s specific needs and increase business. They make money with every transaction and especially if you carry a balance past your due date.

Lowest Interest Credit Card

There is a balance to all of these attributes for a credit card in addition to low interest rates for credit cards. Consumers will have to take into account all of the costs before they make a decision regarding which credit card to select. Some of the factors to take into account are:

  • Annual fee
  • Retail rate
  • Balance transfer
  • Cash advances
  • Travel benefits
  • Other benefits

Annual fee

the annual fee for a card varies from zero dollars to several hundred dollars a year. However many cards that charge a fee are in the $30 range. These fees often offset the interest charges that are forgone for debt transfers from other cards. They also help to defray costs associated with benefits that you may receive for travel etc. Consumers will have to compare the benefits received compared the interest rates that are charged.

Retail rate – the retail rate is the rate charged for retail purchases charged to your card and the balance is carried over to the next month. This is the rate that most people will pay for all of the overdue balances on their cards. Store cards will charge as much as 28%. Most cards charge in the 19% range and low interest rate cards will charge in the 12% range for overdue balances.

Balance transfer

As an enticement, credit cards will lower the interest rate they charge on balances transferred from other cards. There is usually a grace period of a number of months were this rate applies. Then the interest rate will revert to the higher retail rate. The interest rate on balance transfers can be as low as zero % to 10%,. This depends on the card and the credit card company.

Cash advances – sometimes cash advances are need to get you through a difficult financial period. These are known as cash advances and many companies will charge the retail rate or even higher from the date the cash advance was taken out until it is paid off in full. The rate can be higher than the retail rate in many situations.

Travel benefits – with all of these charges that we discussed above, there may be other benefits that are considered useful to some consumers depending on their life style. Travel benefits, health benefits when traveling, points for purchases and insurance for purchases may also be of interest.

Other benefits

Depending on the card there may be other benefits that are attractive to consumers as well. Depending on your life style and your personal needs, when you look at all of the costs and benefits, one card may stand out from another. This card will match your current needs, your long term needs and your life style making it a perfect card for you.

With so many cards available, and so much competition for your credit dollar, these credit card companies are offering great deals and it is definitely worth it to take the time to select the best one to that gives you the lowest interest rate and the best overall deal. We made a small spreadsheet so that we could list all of the options and the benefits along with the interest rates they were offering so that we could make sure that we put the most money in our pocket and not the pocket of the credit card companies. If you can, always pay the balance in full each month to avoid any additional interest charges. This is by far the best way to reduce your overall interest charges.

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Credit Debt

February 7th, 2013 Debt Posted in Credit Cards 1 Comment »

Credit DebtWe all seem to have credit debt issues these days, particularly with the number of credit cards that are carried by adults in North American. I read a statistic that suggested that there are many credit cards in use in North American. So much so, that there are more than there are men, women and children that live on this continent. Every bank has multiple credit card products to offer to their customers to fit every lifestyle choice. Every major store chain has loyalty credit cards and every oil and gas company that sells gasoline has their own credit card as well. They are very convenient to have. No wonder we have such credit debt issues as a culture.

The major difference between the store chain credit cards and the bank credit cards is that the store credit cards charge as much as 10% more than the banks do for their credit cards. The banks are charging around 18% on unpaid balances for credit card debt, while the store chains with credit cards that are billed as loyalty cards are charging upwards of 28%.

Every time you buy something at a store and do not use their credit card, you start getting the sales pitch. They offer free gifts, low interest rates for the first 6 months, even points towards air travel or hotel stays. These are great deals as long as you pay your balance each and every month. As soon as you leave a balance, that interest kicks in and now that great deal has become an expensive deal.

Are Loyalty Cards good Credit Debt

Loyalty cards do have a lot of advantages. They often offer points towards travel or to the purchase of specific products and services. They sometimes offer free health coverage and travel coverage while travelling. Some will offer insurance on anything you purchase and they will double the regular warranty of whatever product warranty was on the item. These are all excellent benefits and many people take advantage of them every year. And really that is the important point. Only take a loyalty card if you can repay the balance each and every month and if it has something of benefit to you that you will actually use.

Credit debt can be expensive especially at the high rates they charge and these charges can wipe out any advantage that you may have gained from the points or the insurance offered by the card. Look at all of the offerings and ask yourself whether you will really use these things to your advantage before you add another card.

What Impact Does Having Multiple Credit Cards Have on my Credit Rating

Credit rating calculations are actually very complex. The calculation is dependent on how much you owe, your history of meeting your payments, how often you apply for credit and how much unused credit there is available to you. Someone who has many credit cards, may find that their rating has dropped a bit due to all of the credit cars that carry and are shown against them. Every time you apply for another credit card, this is another potential debt and another claim against you. People have found that if they apply for several cards at the same time, their credit rating actually drops due to all of the applications and the potential for increased debt.

What is the Best Approach to Credit Debt

First of all always pay all of your monthly payments on time every month for everything. Never miss a payment. Secondly most people will have a mortgage payment, a personal loan for the car, and perhaps two credit cards. With several years of meeting all of your obligations without fail, your credit rating should be in good shape.

Consumers who have to debt and never had any including credit cards would actually have a poor credit rating since they do not have any history to show what kind of borrowers they are. Sometimes it is a good idea to borrow some money and pay it back every month just to establish a good credit rating. Consumers who have missed payments and owe a lot of money to credit card companies and lenders, will typically have a bad credit rating.

With a bad credit rating it is much more difficult to obtain any kind of loan and if you do the lender will charge a higher interest rate to reflect the increased risk of the loan. Try to manage this and never go into debt unless there is no other choice.

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Company Credit Cards

February 7th, 2013 ernie Posted in Credit Cards 1 Comment »

Company Credit CardsCompany credit cards provided by your company are useful for employees and corporations for many reasons and both can benefit from having a credit card that has the company’s logo on it. Employees do not like to charge things to their own personal credit cards and invoice the company. Cash flow is a problem and depending on the amount in question, many employees may not have sufficient available credit on their personal cards. In addition they have to wait a few weeks to be reimbursed for the expenses and may even have to pay interest charges as a result if they do not have the cash to pay the balance before the due date.

Company credit cards solve this issue nicely for employees. It is a separate card and although it is in their name and can affect their personal credit rating, the company is on the hook to pay the balance within the prescribed time frame as agreed on a contract between the company and the credit card company. The employee is still required to provide an explanation of all expenses and obtain approval. There is no personal money involved and the company still receives 30 days of use of their money by having these expenses charged to a credit card and not having to provide a cash advance.

Purchasing Personal Items

Sometimes employees will use the company’s credit card to purchase personal items. This may be a mistake sometimes when they just grabbed the wrong card to pay for something. In other occasions, they might have max’d out their own personal cards and are using the company’s credit card instead. While this is against the rules for most companies, they get away with this by attaching a check with their statement, payable to the credit card company for the total expenses that are considered personal. Supervisors frown on this activity and discourage it whenever they see it, however it does happen often and as long as you pay your share when it is due; there is usually no major problem.

Another situation where personal expenses find their way on to a company credit card is when a combination of personal and business expenses wind up on one bill and the person pays for the entire amount on the company’s credit card. This is also common and easily corrected by calculating the amount and writing a personal check to pay for the personal portion. Again supervisors do not care for this type of transaction since it complicates tracking of expenses and approval process. Companies that apply for tax rebates must also account for the split of personal and company expenses in their calculations, which of course complicates everything.

Negotiating Company Credit Card Plans

Whether you are negotiating for a large company or a small one, there is always an opportunity to negotiate the best deal for your company. Negotiate before you sign and look for benefits that will be valuable to your company and to your employees. If you can save money or get to use money for a longer period of time then it is a benefit. If your employees receive benefits as well then this can be claimed as an employee benefit to make it more attractive to work for your company.

Many credit card companies have standard offerings and you may just have to go with what they have to offer, however again it never hurts to ask.

Match Your Company Credit Card with Your Business Cards

Company branding is important for all business owners. Matching your company’s logo on your business cards, your letter head, on advertising that you do and your credit cards is just one more thing that many companies do to enhance their corporate image. Flashing your company’s logo every time you charge something can be great advertising. Especially if it communicates your business name and product or service that you deliver. You never know when a conversation will get started about your company’s services that may turn into a sale. Never lose an opportunity like this by not having your company’s logo embossed on your company credit cards.

For more details on how to use credit cards, click here.

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How to Get a Low Interest Credit Card

January 21st, 2013 ernie Posted in Credit Cards 1 Comment »

Low Interest Credit CardMany people wonder how to get a low interest credit card because all they have ever heard is that credit cards have high interest rates and consumers should never carry a balance on them over the end of the month. This is true for the majority of credit cards. But there are new products on the market that lenders are offering their best customers. In effect this is a line of credit at a lower interest rate that can be used just like a credit card. Sometimes these cards will come with an annual fee. Also a number of benefits that consumers may find interesting.

These benefits can include such things as travel insurance, rental car insurance, health insurance. Also purchase insurance and points that add up over time that you can use to purchase various things. These points can be used to purchase travel trips, and make hotel reservations. As well as purchase various goods that they will offer via an online catalog. The trick as always is to make sure that you always pay the full balance at the end of the month to avoid paying interest.

Consumers Must Apply for a Low Interest Credit Card

Sometimes we receive offers in the mail from credit card companies that tell us we are pre-approved for their card. All we have to do is fill in the card application and sign on the dotted line to apply. This is the point where you really need to pay attention to the offer and the fine print. Some of these low interest credit cards come with low interest rates for a short period of time. Such as six months and then they go back to the prevailing rate for credit cards which can be around the 18 or 10% range. Store credit cards can be even higher at 28% on unpaid balances.

The attraction of course is the low interest rate. There are other advantages that many cards use to sweeten the pot and entice customers to apply for their card. These include the benefits that we discussed at the beginning of this post.

When you fill in the application for a pre-approved credit card, one wonders is it really pre-approved or will they run you through a second evaluation and then accept some and reject others. Our suspicion is that yes they do review your application, your credit rating, and your work history and income level and then decide to approve the card. Pre-approval means that you are approved for the low interest credit card subject to a final review of all of the information provided to them via the application.

Consumers can Apply Online for a Low Interest Credit Card

There are other ways that answer the question, how to get a low interest credit card. If you have not received something in the mail, consumers can apply on line for a credit card. A simple search for this term turns up all kinds of credit card companies willing to provide you with free credit cards at low interest rates, some with an annual fee and some without a fee.

As writers we are concerned about these applications and that you have to provide all of your personal information to what is essentially an unknown source. This could be an attempt to gather information to be used for other purposes than a credit card application. We suggest that readers be very careful about who they provide information to and how it is being used. For the record this site does not collect any personal information about any of our readers.

Protect your credit card when you are using it. Always know where it is and only use it at reputable locations. In fact never let your credit card out of your site. Use the pin whenever you can to avoid theft of your number and personal information. There are many people out there these days trying to gain personal information they can use to make money.

Apply for a low interest credit card only on recognized sites. Or go to your local bank or financial institution to ensure that your personal information will be properly safeguarded.

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Lowest Interest Credit Cards

January 7th, 2013 ernie Posted in Credit Cards 1 Comment »

Lowest Interest Credit CardsThere are many credit card products available on the market and not only are the banks offering these low interest rate credit cards, but also many other lesser known financial institutions. They offer everything from free debt transfer from other credit cards with no interest on this debt for the first 6 months to 1% interest on debt transfers. Once the initial period is up they all tend to raise their rates to their standard level which can be anywhere from 11.99% to 18 or 19% depending on the card. Some cards will have an annual fee while others will offer their products without an annual fee. They recover their costs in other ways by relaxing their offerings in other areas. There are so many credit cards on the market and it can be difficult to know which one to choose.

How To Decide what Credit Card to Select

There are both short term advantages and long term advantages to all of these cards. Some are better than others and the consumer is faced with choosing a product that appears to be complex and has a variety of attractive options. We decided on a credit card which we will not mention in this post since we are not promoting any products. We looked at the all of these credit cards based on our life style, our spending habits, our short term needs and our long term needs. These were the four basic criteria that we used to make our decision. Readers may have other criteria that are more important for them. We will explain our rationale in more detail. We hope this helps readers with their own decisions regarding which card they use.

Life Style – our current life style is one in which we travel a lot. As a result a large credit limit is important as are the opportunity to collect points that can be used for travel. We also like the advantages of travel insurance, health insurance while we travel and travel cancellation insurance. Car rental insurance is another advantage for us as well. If you do not travel much or never, then you may not need a card with these advantages. You may want to evaluate your life style needs in the short term as well as the long term to help you select the correct card.

What are you Spending your Money On

Spending habits – we charge everything to our credit card in an effort to maximize our points. We also like the idea of insurance on the things we buy, both in terms of replacement as well as extending the warranty of the item we purchase. We pay our credit card balance in full each month and do not carry a balance so we are not as concerned about interest rates, although having a low interest rate credit card would be an advantage for the few times we allow the balance to run over for the month.

Short Term Needs – our short term needs do not seem to vary much from our long term needs. However if we carried a balance on our credit card, the lowest interest rate card would be the best for us since it would minimize our interest payable. In a situation like this we would welcome the ability to transfer unpaid balances from other credit cards and pay no interest or a low interest rate on any of these transfers. Most of these credit cards only offer zero or low interest rate for a limited amount of time, so this is something to be aware of.

Long Term Needs – Over the long term most credit cards are pretty much the same except for interest rate and other advantages such as travel benefits and points. If the travel benefits are not important then the focus should really be on what interest rate you are going to pay for any unpaid balances. The lowest interest rate credit card over the long term is really the best product for us.

Summary – Lowest Interest Credit Cards

Many credit cards sound great especially when they are selling great offers for you to sign up. These can be significant advantages in the short term. Remember that they can impact your credit rating if you sign up for too many of them and they can be hard to keep track of if you have a lot of them.  We like to stick with two basic credit cards with low interest rate and lots of travel benefits.

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Business Credit Cards

December 7th, 2012 ernie Posted in Credit Cards 1 Comment »

Business Credit CardsFor quite a few years many companies provided business credit cards to their staff who regularly traveled or incurred business expenses. For some it was almost a status symbol to have a company credit card. In the past few years companies have cut back on expenses extensively and one of these cutbacks involved the company credit card. The company credit card was a business card that provided cash flow to the employee instead of having to obtain a cash advance before they went out on a business lunch or a trip. It was a lot more convenient and the company did not have to pay for these expenses for 45 to 60 days.  There is still a major advantage to the company for providing business credit cards, however there have been cut backs. Many people now have to use their personal cards.

Business Credit Cards Distributed to Senior People

Lower ranks are increasingly being asked to use their own credit cards to pay for lunches; hotels etc and then submit an expense claim. Senior people in the company i.e. executives and middle management still seem to have business credit cards which they are free to use for business related activities.

Sales people who are entertaining customers and travelling to meet with customers are still using a business credit card. These cards have larger limits on them, which means you can typically charge larger amounts to these cards than you would to a personal credit card.

One of the problems with business credit cards is that the impact of these cards if they are not paid on time is that they can affect your personal credit limit. The card carries the company logo, but they are in your name and on your credit. If the company is late for whatever reason in paying, you may experience a drop in your credit rating.

Most companies have a standard payment process that takes a specific amount of time once the expenses are approved. Sometimes employees forget to submit their expenses to their boss for approval and then payment gets delayed. This is something that we all have to be aware of due to the impact on your personal credit rating.

Business Credit Cards for Consultants

Typically companies do not provide or authorize company credit cards for consultants working for them even if the consultant is on the job for a long period of time. The consultant must book all of their trips including airfare, hotels and meals on their own credit card and then include these amounts in their invoice for the work that has been completed. There are several issues to be aware of in these situations.

A consultant should have a separate credit card for all of their business transactions. This is one of the best ways to keep track of and separate business related expenses that you will be billing back to your customer vs. those that are personal in nature. Consultants will often have a very large limit on their cards to handle the increased expenses especially if they travel a great deal.

Only Approved Expenses on Your Business Credit Card

Another issues that both employees and consultants need to be aware of is that only approved expenses should be placed on a business credit card. Certainly no personal items should be charged to a credit card of this type. Also only expenses that have been pre-approved should be charged to these credit cards.

This is especially true for consultants and for large expenses such as trips and purchases of equipment. Trips and large pieces of equipment should be always approved ahead of time, otherwise that expense could be not approved by the appropriate people in the company and the person is left holding the bag so to speak for all of these expenses.

This is probably the single largest issue for people who carry business credit cards. Always make sure that your expenses will be approved by the appropriate people when they are submitted for payment.

These cards can be an advantage for many sales people as well, since most employees do not have sufficient limits on their personal cards to handle all of the expenses associated with business travel. Like all credit cards they must be managed with care.

For many more posts about dealing with credit cards, click here.

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Credit Card With Low Interest Rates

November 21st, 2012 ernie Posted in Credit Cards 1 Comment »

Credit Card With Low Interest RatesThere are credit card with low interest rates available, however many of these cards have initial interest rates that are low and then they jump to regular rates after you have had the credit card for six months. This is the usual sales pitch for many of these companies. They will offer a new credit card with a low interest rate on all transfers from other accounts for a period of six months. At the end of the six months the interest rate on any remaining balance will climb to the usual level for credit cards which is around 18% to 19% on any unpaid balance.

This can be a good deal for many people who have existing credit card balances providing that you can pay this new card in full at the end of six months. Any unpaid balance is going to have interest charges levied at the full rate charged by that particular credit card. Unfortunately many people do not repay the balance for one reason or another and they are faced with the same high payments again.

Credit Card With Low Interest Rates

These credit card companies will even provide you with checks that you can fill in and send to the other credit card company to pay off this balance. They make it really easy to take out new credit and to also transfer money as well. Just write a check and send it off and you are done. The clock begins ticking as soon as the money is transferred out of your new credit cards account and you will want to keep track of this date so that you avoid paying any unnecessary interest charges.

Should I Consider a Low Interest Rate Personal Loan Instead

Interest rates on credit cards can be very low as incentives to persuade customers to transfer their balances over to them. They are attractive and there is no effort. You do not even have to fill in an application in many cases or meet with a loan manager. Personal loans on the other hand will require an application to be filled in, a meeting with a lender in many cases and more paperwork to sign before you can be approved for a personal loan.  Most people will take the easy approach and use the credit card, even if they can save some money in terms of interest charges in the long run.

The key piece of information that should be considered is how long you will need to borrow the money. Both are loans and both have different terms to be compared. Personal loans will have a fixed term with a fixed interest rate for the term. Credit cards with a low interest rate initially will increase after the initial offer and then vary depending on the balance each month. This can be a complicated mathematical calculation compared to the personal loan, but rest assured that the personal loan with a lower interest rate is going to cost you less if you need the money for longer than a year’s time.

Other Incentives with Low Interest Rate Credit Cards

Some credit cards that have low interest rates also have other features that can be very valuable to many consumers. Travel insurance, car insurance, health insurance, purchase insurance and also gathering points that can be used to pay for various gifts, hotels and air travel are huge value to many consumers. This incentive alone will cause customers to charge as much as they can to their credit cards.

Still, we all have to be able to pay the balance at the end of the month to avoid triggering interest charges that can be as high as 18%. The low interest credit card is usually only applied to amounts that are transferred from other credit cards. Anything else that is charged to the card and not paid at the end of the month will be charged at the regular interest rate of 18%.

There is absolutely nothing wrong with selecting a low interest rate credit card. Like all products of this type, it is important to manage them properly and to only borrow what you can afford to repay on time triggering the least amount of interest.

For more posts about credit cards, click here.

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Credit Card Limit Increase

October 8th, 2012 Debt Posted in Credit Cards 1 Comment »

Credit Card Limit IncreaseCredit card limit increases are often automatically added to your account. How often have you received an automatic increase on your credit card limit without being asked if you wanted it? You did not apply for a credit card limit increase and this notice just showed up in the mail one day with your name on it and your account with a new credit limit. I used to think these things were a bit scary, but now after listening to CNN, I am less concerned about my credit rating and more concerned about my ability to stay within the limits of the old level. With more credit, will I charge to the limit or stay where I used to be and pay it off each month?

Credit Card Limit Increases Actually Help Your Credit Rating

CNN provided the following advice:  when a credit card company increases your credit card limit, it actually is a good thing. Your credit rating or at least one third of the rating is determined by the percentage of the limit that you actually use on your credit card. For example if your current limit is $5000 on your credit card and you routinely spend up to $2500, then you are only using 50% of your limit, which is pretty good. Now if they increase the limit from $5000 to $10000 and you still only routinely spend $2500, then you have lowered your utilization from 50% to 25% which is a significant improvement.

Can you Maintain the Discipline

Now there is a concern here that everyone should be aware of and is probably obvious to everyone. Can you stay at the present level or will you gradually over time move up to the $5000 level or worse to the maximum allowed on the card? If you do, your credit limit is going to tank and if you miss a payment or two, then it really will tank. So provided that you do not run the credit card up to its limit and you pay it off every month your credit rating should remain in great shape. Amazing

Managing Your Credit Card Limits

Most people have multiple credit cards. Some are loyalty cards, some are backup cards etc. Personally the writer carries two loyalty type credit cards. One credit card that we use every day for a variety of purchases. We have a second card for backup purposes. It is just in case the first main credit card is compromised while we are traveling. The loyalty cards have both increased the limits without being asked. The remaining cards have maintained the same limits at my request for many years.

We took this action for one reason and one reason only. We want to limit how much we can charge to any credit card for personal self-discipline reasons. Our family does not want the credit card limit increases to be automatic. We really do not need the extra limit and we want the personal self-control.

We pay our credit card balances every month so there is no ongoing balance. Which is another reason the credit card limit increases have been automatic.

The Real Danger of Credit Card Limit Increases

Over the years many people have found that they have charged their credit cards up to the limit. Then have had some difficulty in repaying the balance in full. Regardless of the reason you charge the credit card to its limit. The last thing you need at this stage is to have the limit increased. Without will power, most people are just going to keep charging. Before they know it will reach this new limit.

Your credit rating might have initially increase as per the above statement. If you miss a payment or cannot repay the balance owing quickly, your credit limit is going to sink like a stone. Before you know it, the banks will not talk to you. You will find it difficult to get a loan from many places at interest rates that are reasonable. Next thing you know you are considered a bad credit risk and cannot get any credit.

Credit card limit increases are ok sometimes. However you must manage this credit limit very carefully. Avoid over using these credit facilities as much as possible. If you do, as a consumer you will be able to maintain your credit rating. You will also be able to get that loan when you really need it at an interest rate that is very competitive.

 

 

 

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Swipe Credit Cards

June 21st, 2011 ernie Posted in Credit Cards 1 Comment »

Swipe Credit CardsCredit card issuers in the United States are moving to a new credit card system for fighting fraud and are gradually migrating all of their customers to the new technology each time the consumer renews their cards.   Each new credit card will have an embedded computer chip that can store and process data more securely. Your new credit card looks exactly the same with two differences.

First there is a new marking on the card, usually on the left hand side that looks like a small computer chip printed circuit board. This is the brains of the card and contains all of your information including your pin number. The second major difference is a symbol on the right hand side of the card which looks like a series of   ))) , which signifies that you can swipe your card against a reader for faster processing.

Swipe Credit Cards – Chip Credit Card

The chip that has been embedded in the plastic of the card, not only makes it harder to duplicate your information and produce a new card, it also increases the security when you make your purchase as well. Each time you use your car you personally must ok the expenditure and enter your pin number to approve the charge.  this is a great step forward and increases security and reduces fraud. We are not so sure about the second feature of these cards.

Swipe Function On Your Credit Card.

As we mentioned earlier, the second major difference is a symbol on the right hand side of the card which looks like a series of   ))) , which signifies that you can swipe your card against a reader for faster processing. Any credit card terminal that displays the same symbol can be used to approve an expenditure. All you need to do is wave your card within an inch of the terminal and all of your required information is transferred to the terminal and your transaction is approved. Certainly fast and convenient but how safe is it in terms of fraud.

Imagine if your card is stolen. All the thief has to do is go to places with this symbol and pass your card in front to purchase goods. He or she is limited to these types of terminals and there is probably a limit to how much you can purchase this way. Still, it is another way to have fraudulent expenses billed to your account based on this process.
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New Chip Credit Cards

December 21st, 2010 ernie Posted in Credit Cards 1 Comment »

New Chip Credit CardsCredit card issuers in Canada are moving to a new system for fighting fraud and are gradually migrating all of their customers to the new technology each time the user renews their cards.   Each new credit card will have an embedded computer chip that can store and process data more securely. Your card looks exactly the same with two differences.

First there is a new marking on the card, usually on the left hand side that looks like a small computer chip printed circuit board. This is the brains of the card and contains all of your information including your pin number. The second major difference is a symbol on the right hand side of the card which looks like a series of ))) which signifies that you can swipe your card against a reader for faster processing.

When you present your card for payment at a store, you will enter a personal identification number, just as you do for debit cards. The new cards will still have a magnetic stripe on the back to ensure they are accepted in other countries or by vendors that have not yet adopted the chip technology in their card readers. Most Canadian Venders now accept these chip cards and use chip card readers.

New Chip Credit Cards – Why Use This New Technology

The reason the credit card companies are adopting this new technology is to reduce the amount of fraud that they are experiencing due to stolen and copied credit cards. The advantages of these new chip credit cards are:

  • The card never leaves your eyesight, because you need to plug it into the reader and then enter your pin number
  • The card is much more difficult to copy
  • The pin number is private ( never write it down or give it to anyone else)

For those of you who have not used one of these cards yet, they are pretty easy to use. First of all the vendor must have a terminal that is equipped with the new reader for chip cards. All you need to do is to plug it into the card reader at the bottom and leave it there until the transaction is completed. Once it is plugged in it is a simple manner to follow the instructions on the screen to approve the transaction and then enter your pin number. Once approved, the card reader will automatically print a receipt for you.

Adding Tips to the Transaction

You can even add tips to the transaction if you are using your card at a restaurant. Be careful though. The last one I used, gave me two choices. One was an automatic 20% tip which I thought was a little rich, so I used the other selection which allowed me to select either a dollar amount or a different percentage.

Overall, I like this new approach. I am in control of my card at all times and there is less chance of fraud with the card, which protects the card holder as well as the bank. The waiter told us that one store in the mall that we were in , had a card reader ( unknown to the owners) that had a double reader inside. One was for the transaction and the other was to read the information on the strip so that it could be copied. With a chip reader this problem goes away!

So far, Visa is saying that they are extending their zero liability policy to the chip cards. Still you need to make sure that you keep your pin number private, don’t give it to anyone and do not write it down to protect yourself and the card company. If in doubt check with your credit card company. One important point is that if you do a lot of transactions over the phone, never give your pin number out. There is no need to provide it and if asked, by a vendor, you are probably being set up for a fraudulent transaction!

More Questions

If you have more questions about your new chip credit card, don’t hesitate to call your credit card company. They are the only ones that give you specific answers based on the agreement they have with you. Anything else you get from anyone can only be a general answer at best.

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