Corporate Credit Cards – How They Impact Personal Credit Score

A corporate credit card can impact and affect your personal credit score; take a look at your credit report. If you are a small business owner and have a small business “corporate card, then it is very likely that your corporate card will have a substantial effect on your credit. It will appear as a “trade line” on your credit report, and balances, delinquencies, and payment history will all be incorporated into your credit score.

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2010 Credit Card Rule Changes

What changes were made in the credit card rules in early 2010 and how it applies to the holder of a credit card are discussed here. The credit card company must give you 45 days notice if they plan to change your fees or terms and give you a chance to opt out of the changes. In response to the Credit Card Act of 2009, the Federal Reserve Board made recent changes to Regulation Z, the set of rules that implement the Truth-in-Lending Act.

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Personal vs. Business Credit Cards

Personal credit cards offer moderate or low credit limits, minimum monthly payments, and lower interest rates, compared to most corporate business credit cards. Personal credit cards also come with a lot of legal protections aimed at consumers. Few of these protections carry over to business credit cards.

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What is credit insurance?

Credit insurance has several different meanings. Business owners can buy business or trade credit insurance to insure the lines of credit that they extend from their business. This credit insurance protects business owners from debtors who default on their payments or become insolvent through bankruptcy.

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Can I avoid finance charges on some forms of credit?

Because many credit card companies make their money by charging consumers finance charges, these charges will be included in most contracts for lines of credit. Credit card finance charge is fancy way of saying interest. The interest is tacked on to a consumers credit line balance if the consumer does not pay the total balance on the credit card within the billing cycles “grace period.”

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What is a secured credit card?

A secured credit card is a credit card offered by a bank or other credit company in exchange for or secured by collateral. While many credit cards require an individual to have an average or above credit score, a secured credit card can be acquired even when an individual has a poor credit history or no credit at all.

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Types of Consumer Credit

What is credit? There are three main types of consumer credit. Noninstallment credit, Installment Closed-End Credit, is the simplest form of credit and is usually for a very short term, such as 30 days. The buyer makes one payment at or before the end of the credit period. This kind of credit enables consumers to take possession of property immediately and pay for it within a short time. Many department stores offer noninstallment credit to their regular customers; this enables the store to make sales and get the money in the near future, thus generating better cash flow for the business than might otherwise occur.

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What is the difference between a fixed interest rate and a variable interest rate?

A fixed interest rate means that the rate of the finance charge does not change throughout the duration of the extension of credit. Whereas, under a variable interest rate loan, the finance charge is determined by an index, such as the ‘prime rate’ published nationally each quarter for short term loans charged by banks. There are advantages and disadvantages to each kind of loan. Variable rate loans often have additional options. Fixed rates, on the other hand, give you security and stability, and let you plan for the future with certainty.

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What is the Truth in Lending Act?

The Truth in Lending Act (TILA), passed in 1968, is a federal law that regulates the credit market and sets minimum standards for the information that a creditor must provide in an installment credit contract. The Truth in Lending Act applies when businesses or individuals extend credit to consumers, when the credit is payable by written agreement in more than four installments, and when credit is subject to a finance charge.

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