This post is the final part of a four-part series on credit card reform.

In the three previous posts, I discussed the possible affect of the credit card reform bill that was passed by the US Senate earlier this month. The bottom line for consumers and small businesses is that this new legislation will probably not have the desired affect its supporters had hoped for, and it may even lead to some negative consequences, such as smaller credit limits, higher fees, and less credit availability.

In response, many consumers and small businesses in search of credit will turn to credit card alternatives. Some will make this switch by choice, while others will do so because they have no choice.

Whichever category you or your small business falls into, you might as well familiarize yourself with some of the more popular credit card replacement options:

Credit Unions

Credit unions are basically small banks that are cooperatively owned by their members and run by the community at large. These local banks are generally more personable and they have the added benefit of limited interest charges as well as a vested interest in supporting the local community. They are a good place to turn for small business loans as well as personal lines of credit.

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Debit Cards.

Debit cards work just like credit cards and are accepted everywhere that credit cards are accepted. The only difference is that the money that you spend is immediately deducted from your bank account. Keep in mind, however, that if your card is lost or stolen, you risk losing the balance of money in your account.

Prepaid Credit Cards.

Like debit cards, prepaid credit cards work just like credit cards and are accepted everywhere that credit cards are accepted, but you have to put money into the card before you can use it. The major benefits to this method include more control over how much money is being spent and greater safety should the card be lost or stolen. The major drawback is that many prepaid cards charge a monthly fee in addition to a fee on transactions.

Bank Overdrafts.

A bank overdraft is a line of credit, much like a credit card, except it is directly connected to your bank account. A bank overdraft allows the account holder to overdraw the account up until a predetermined limit that is set by the bank. The outstanding balance may then be carried over from month to month, but it will accrue interest charges.

Charge Cards.

Charge cards work just like credit cards except the monthly balance made be paid in full each month. Unlike credit cards, charge cards do not have a monthly spending limit, and you can make an unlimited number of purchases. Many charge cards come with a yearly fee, and impose hefty penalties when the balance is not fully paid.

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This post is the third of a four-part series on credit card reform.

The consumer reaction to the credit reform bill has been taking the spotlight ever since the legislation was approved by the US Senate two weeks ago. Though the changes proposed in the new legislation will have some effect on consumer credit card usage, the under-emphasized fact is that smaller businesses (particularly those in retail) stand to bear the brunt of the fallout.

What makes small businesses special is that they are involved with credit cards both as a source of quick financing and as a way to extend credit and convenience to customers.

There has already been movement among the major business credit card issuers to drop their small business customers, or at the very least raise interest rates while reducing credit limits. My guess is that after the legislation goes into effect small businesses with good credit will see their rates continue to rise (albeit with greater disclosure) while their credit limits will continue to shrink.

Many of the “riskier” small businesses- those with bad credit and poor sales, or even those who have missed a couple of payments (how many small businesses out there these days don’t fit into this category?)- will have their accounts closed. In other words, they’ll just be dumped.

On the other side, the credit reform bill may result in a reduction in consumer spending by encouraging credit card holders to use cash or other credit card alternatives. Moreover, we can probably expect an increase in fees charged to retailers for processing credit card transactions.

None of this is good news for small businesses.

So what can small businesses do in response to the new credit card legislation? For one, small businesses must pay attention to any changes in credit card fee structures and incentives programs and then tailor their own credit terms and business practices around them. They should also look for alternative sources of quick financing, such as factoring receivables or turning to a community bank. It may take a little work, but it could shield a business from all the fallout.

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My company has been with Jumpline Hosting for over 9 years. We’ve had our share of problems but never switched because it was a pain in the butt. Their service is slightly above awful at best. Lately things have really become bad and our website has gone down too many times to count.

I emailed them today with this question:

2nd time today the site has “went down”.  Earlier it was restarted which seemed to get it going again but now it’s back down.

Here’s the response from them:

Dear Scott White,

Sincerely,
Tim Robison
Jumpline, Inc. Support Team

Jumpline, Inc.
101 E. Town St.
Suite 540
Columbus, Ohio 43215
USA

Toll-free 1-800-651-2028
Local 1-614-859-1170

Since nothing in our site has changed I was dumbfounded by this response. High load? My account is fully paid for and you will just rip it down without even the graciousness of a warning email/phone call?  What kind of way is that to treat a long time customer?

So I called Jumpline.com, currently I’ve been on hold for 40 minutes, ah…fun times with Jumpline.com. I spoke with Joe Elson and asked him what they meant by “high load”? Joe read from a list of 6 or 8 things it might be but couldn’t tell me what it was and how to fix it. So I asked for a supervisor. I was told he wouldn’t talk to me but they’d open up a ticket to see if they could find out why.

Here’s the deal, cutting a customer off that has paid for their service in advance is wrong on so many levels. Not notifying the customer of said cut off just makes you look like jerks who don’t care about their customers.

I’ll be switching to a new hosting company tomorrow. Good bye Jumpline!

This post is the second of a four-part series on credit card reform.

Two weeks ago the US Senate approved a credit reform bill designed to protect customers overburdened by their financial obligations and subsequent poor credit ratings. But even after the bill was pushed through the Senate, one glaring question still remains: Will the credit reform bill help the nation’s current financial mess, or will it only make things worse?

I’ll put my bets on the latter.

While the more genteel voices of protest have been claiming that the credit card companies are engaged in a slew of unethical (or at least questionable) business practices, many unabashedly accuse the credit card industry with outright loan sharking, predatory lending, and deceptive advertising.

Though some of the practices in question may change as a result of the new credit reform legislation, the fact that the Senate failed to place a cap on interest rates is definitely a big win for the credit card companies, and I have no doubt that they will take advantage of it.

Moreover, bank officials and credit industry pundits have been threatening to make up for lost income generated by riskier borrowers by going after the people with good credit (to the tune of reinstating annual fees, curtailing rewards programs and charging interest immediately on purchases). My feeling, however, is that most of it will just turn out to be a lot of hot air.

The credit card industry is in the business of making money, and it will stay that way. What we can expect instead is a transformation. Though it may be a little harder to get a new credit card once the new legislation goes into effect and it may even be a little less convenient or a bit more expensive for those who have it, the credit card companies will eventually devise other methods for incentives and “rewards” programs that will encourage people to keep spending.

In short, my guess is that the credit reform bill will result in a great divide. Those with sterling credit will just use their cards less, which may result in less consumer spending. On the other hand, those with moderate to poor credit will still be stuck in the same debt mud- just under slightly different terms and conditions.

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News and Stories | Contributors

Editors:

Senior Editor - Fred Billsworthy

Assistant - Richie Pryor

Journalists:

Gary Barzel

Rachel Walker

Ella Grinbaum

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This post is the first of a four-part series on credit card reform. The next three posts in this series will discuss the expected effects of the credit reform bill in general as well as how credit reform may effect small businesses in particular. The series will then end off with some credit card alternatives.

Two weeks ago the US Senate approved a credit reform bill designed to add a level of regulation and control to the credit card industry which many proclaim is aimed at trapping its customers in a cycle of debt with unfair business practices and deceptive credit card offers. Here is a summary of the major changes approved by the Senate:

• Interest rates cannot be raised during the first year of an account, and promotional rates must be in force for at least six months. After this time, should the credit card company choose to increase the interest rates, then customers must be notified about these changes at least 45 days in advance.

• A customer must be over 60 days late on payments before the interest rate can be raised on the remaining balance. If the customer then pays the minimum payment on time for six consecutive months, then the rate must return to its previous level.

• Bills can be paid online or over the phone without generating processing fees.

• Over-limit fees are prohibited unless cardholders are told that the purchase will put them over their limit and they authorize it to go through anyway.

• If your card has more than one interest rate on balances, for example one for purchases and one for transfers, then partial payments must be applied to the highest interest rate first.

• Gift cards and gift certificates cannot expire within five years of activation, and issuers are banned from charging dormancy or inactivity fees on gift cards for unused amounts.

• Credit card statements must be mailed out 21 days before the payment is due.

• If the credit card company gets a payment by 5 pm on the due date, then it is considered “on time.” Also, no more late fees if the due date is a Sunday or a holiday and the payment does not arrive until a day later.

• Individuals under 21 will need an adult co-signer on their cards unless they can prove that they have the means to make payments on their own. They must also get permission from parents or guardians to increase credit limits.

• Credit card agreements will have to be posted on the internet

And what is missing…

The Senate rejected a proposal to cap credit card interest rates at 15%. Many claim that this measure was needed to “put real teeth into an otherwise solid bill.”

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As a registered Republican it’s been interesting to see how the party would right itself after the election. I’ve waited and waited. Nothing. The Republican party is a real mess. And they’ve lost their brand identity completely. Right now it doesn’t know which direction to go in.

85% of the problem was George W. He single handedly made everyone in the Republican Parties name mud. But now he’s gone and it’s time to rebuild conservatism within the party. Sure Obama and the general public will continue to blame George W. for all their problems but the truth is it’s on Obama and the Democrats now as they control the country.

So what can Republicans do? Which direction should they go in?

They need to go back to their roots and core brand identity. They need to stand for capitalism, the small business owner, they need to fight the urge to tax everything (like what’s rumored now -soda), they need to stand for big business, they need to stand for LESS government involvement. Conservatism. They need for someone to step forward and start to be the NEW face of the Republican party. Who is that new face?

Now you’ll always have your far right and left in any party so I’m basically going to eliminate them from the equation. I’m also going to eliminate abortion from the issues as the country continually votes 50/50 on the issue. If abortion is tops on your personal voting list you’ll most likely vote in that direction. So if the Republicans bring a pro life candidate through it really won’t make too much of a difference one way or the other. The real issues here are conservatism. But done right.

Currently the Republican party has absolutely no voice as the Democrats control the House, Senate and Presidency. So really there is not much they can do to make a difference. It looks like their strategy is to sit back and give the Democrats enough rope to hang themselves. And I believe this hands off strategy is best and could work. But only time will tell. Right now the American people are still star struck with Obama. Let’s see how they feel 2 years from now.

It’s time to re-build the Republican brand. Not on religion. Not on sensitive issues like abortion or gay marriage (even though Obama was clearly against gay marriage). These issues will all middle out. The one thing that crosses over to all the people is money. Money gets votes. Will you have more or less. Will your small business be over taxed to death or not. Will the government be telling you where to eat (and what not to drink), which car to drive, what bank to get a loan from etc.

Republicans need to unite, start sending some leaders to the forefront. Where is Mitt Romney or Newt Gingrich? Personally I think a smart businessman like Mitt Romney is the answer the Republicans need to bring forward conservatism. He’s a proven business leader.

What are your thought fellow Republicans, where should the party go as a brand?

It used to be that credit insurance was exclusive to the large companies that could afford to pay the high premiums in exchange for a bit of financial peace of mind. Not any more. In response to the economic slowdown and an across-the-board reduction in consumer spending, now even small and mid-sized businesses are considering this risk management tool.

Credit insurance, also known as business credit insurance, protects the insured business from customers who pay late on their invoices or who become insolvent. Though insured businesses cannot get money up front, as in the cases of factoring or invoice discounting, credit insurance provides a safety net that protects these businesses from the financial suffering incurred due to a debtor’s protracted default, insolvency or bankruptcy.

Generally, companies that accrue a few million dollars in yearly revenue can get credit insurance. Small and mid-sized business owners should keep in mind, however, that premiums vary greatly depending on the size of a business and its industry as well as on the credit terms that the business extends to its customers (i.e. are invoices payable within 30 days versus 90 days).

Even so, credit insurance may be worth the cost for smaller businesses in exchange for the peace of mind it brings in these financially turbulent times.

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With all the talk about the recession, job insecurity and lay offs, here are a few business jokes to lighten things up a bit.

The Flowers

A new business was opening and one of the owner’’s friends wanted to send flowers for the occasion. They arrived at the new business site and the owner read the card; it said “Rest in Peace”. The owner was angry and called the florist to complain. After he had told the florist of the obvious mistake and how angry he was, the florist said. “Sir, I”m really sorry for the mistake, but rather than getting angry you should imagine this: somewhere there is a funeral taking place today, and they have flowers with a note saying, “Congratulations on your new location!”

Your First Worry

Fresh out of business school, the young man answered a wantad for an accountant. Now he was being interviewed by a very nervous man who ran a small business that he had started himself.”I need someone with an accounting degree,” the man said. “But mainly, I”m looking for someone to do my worrying for me.”"Excuse me?” the accountant said.”I worry about a lot of things,” the man said. “But I don’t want to have to worry about money. Your job will be to take all the money worries off my back.” “I see,” the accountant said. “And how much does the job pay?” “I’ll start you at eighty thousand.”"Eighty thousand dollars!” the accountant exclaimed. “How can such asmall business afford a sum like that? “That,” the owner said, “is your first worry.”

Just Kidding

Reaching the end of a job interview, the human resources person askeda young engineer fresh out of MIT, “And what starting salary were youlooking for? “The engineer said, “In the neighborhood of $125,000 a year, dependingon the benefits package. “The interviewer said, “Well, what would you say to a package of5-weeks vacation, 14 paid holidays, full medical and dental, companymatching retirement fund to 50% of salary, and a company car leasedevery 2 years - say, a red Corvette? “The Engineer sat up straight and said, “Wow! Are you kidding? “And the interviewer replied, “Yeah, but you started it.”

The Order

A customer sent an order to a distributor for a large amount ofgoods totaling a great deal of money.The distributor noticed that the previous bill hadn ‘t been paid. Thecollections manager left a voice-mail for them saying, “We can ‘tship your new order until you pay for the last one. “The next day the collections manager received a collect phone call, “Please cancel the order. We can ‘t wait that long. ”

A Professional Quiz

The following short quiz consists of 4 questions and will tell you whether you are qualified to be a “professional.” Scroll down for each answer. The questions are NOT that difficult.

1. How do you put a giraffe into a refrigerator?

The correct answer is: Open the refrigerator put in the giraffe and close the door. This question tests whether you tend to do simple things in an overly complicated way.

2. How do you put an elephant into a refrigerator?

Open the refrigerator put in the elephant and close the refrigerator. Wrong Answer!

Correct Answer: Open the refrigerator, take out the giraffe, put in the elephant and close the door. This tests your ability to think through the repercussions of your previous actions.

3. The Lion King is hosting an animal conference. All the animals attend except one. Which animal does not attend?

Correct Answer: The Elephant. The elephant is in the refrigerator. This tests your memory.

OK, even if you did not answer the first three questions correctly, you still have one more chance to show your true abilities.

4. There is a river you must cross. But it is inhabited by crocodiles. How do
you manage it?

Correct Answer: You swim across. All the crocodiles are attending the Animal Meeting. This tests whether you learn quickly from your mistakes.

Employee Want Ad Translations

Energetic self-starter: You’ll be working on commission.

Entry level position: We will pay you the lowest wages allowed by law.

Experience required: We do not know the first thing about any of this.

Fast learner: You will get no training from us.

Flexible work hours: You will frequently work long overtime hours.

Good organizational skills: You’ll be handling the filing.

Make an investment in you future: This is a franchise or a pyramid scheme.

Management training position: You’ll be a salesperson with a wide territory.

Much client contact: You handle the phone or make “cold calls” on clients.

Must have reliable transportation: You will be required to break speed limits.

Must be able to lift 50 pounds: We offer no health insurance or chiropractors.

Opportunity of a lifetime: You will not find a lower salary for so much work.

Planning and coordination: You book the bosses travel arrangements.

Quick problem solver: You will work on projects months behind schedule already.

Strong communication skills: You will write tons of documentation and letters.

Equation of Earnings

Engineers and scientists will never make as much money as business executives. Now a rigorous mathematical proof has been developed that explains why this is true:

Postulate 1: Knowledge is Power.

Postulate 2: Time is Money.

As every engineer knows,

Work = Power * Time

Since Knowledge = Power, and Time = Money, we have:

Work = Knowledge * Money

Solving for Money, we get:

           Work
Money = ----------
         Knowledge

Thus, as Knowledge decreases, Money increases, regardless of how much Work is done.

Conclusion: The Less you Know, the More you Make.

Note: It has been speculated that the reason why Bill Gates dropped out of Harvard’s math program was because he stumbled upon this proof as an undergraduate, and dedicated the rest of his career to the pursuit of ignorance.

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A year ago, I posted this article offering tips for employees who are dealing with workplace bullies. Then, workplace bullying was already a hot topic. These days, as people face growing job insecurity and tough economic times, an underlying feeling of unease is brewing. The issue of workplace bullying has not only become more significant, but this trend will likely grow in the future.

A case in point, check out this article published in the New York Times last week about women bullying other women in the workplace.

For business owners it is important to understand where the motivation for bullying in the workplace is coming from, be able to identify it, and know how to properly handle and prevent it. A workplace bully is a destructive force that can negatively impact employee moral, productivity, and development; it can also put a wrench in an otherwise functioning organizational system. Just ignoring the problem will only make it worse.

Though the Times article presented a few possible reasons for the increase in woman-to-woman workplace bullying, in my opinion, business owners should keep two things in mind: 1. Bullying behavior usually stems from stress and insecurity, and 2. Job-related stress and insecurity increases when employees are not properly appreciated, valued, or respected. It also more likely to occur in a business where employee advancement and development is difficult. (In the case of female bullies, a woman will feel more insecure and threatened around another woman who could possibly take her place or outshine her.)

Business owners will greatly benefit from recognizing the signs of workplace bullying and working to rectify the situation whether it requires firing the disruptive employee or making some changes in the way employees are treated. Though both options may be difficult, business owners have a lot to gain in the long run.

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