What is a Cash Advance?

What is a Cash Advance?

Have you ever wondered what is a cash advance? It is a loan that is funded from an open balance in a credit card account or line of credit. A cash advance is a common feature that is offered to consumers by their credit card providers.

SureSwipe in South Africa offer cash advances to businesses when they need them.

The amount that can be borrowed and how often it can be borrowed will be dependent on the terms and conditions of the credit card agreement.

How Does a Cash Advance Work?

There is a credit limit attached to your credit card and the issuer will also set a cash advance limit. The limit set will usually be the credit limit available or percentage of that amount.

A cash advance can be taken from an ATM with the users PIN or at the issuers bank counter.

You can’t exceed the cash advance limit at the ATM but it will dispense real currency. There are cases when the amount does exceed the limit but the ATM will still dispense it, however the exchange will become flagged. This can then lead to a penalty or fee.

Why Would You Use Cash advance?

Credit cards and debit cards are widely accepted there are still merchants that will still only accept cash.

You wouldn’t take a loan for such an amount and with a debit card you may only use what is in the account.

If you have a cash emergency, then taking a cash advance against your credit card balance is a practical option.

The Cost

It can actually become expensive to take a cash advance so you should look at other methods of payment before you jump into more debt.

There are usually high fees attached to taking a cash advance as well as a high interest rate that is charged on the borrowed amount. This rate is usually higher on an advance than that on a card purchase.

The monthly credit card payments will generally go toward card purchases first with the lower interest, which means a cash advance will stay on the account longer with high interest until it is paid.

The ATM may also have a charge for taking the money so you then incur this and any issuer fees for the service.

A cash advance is then real cash that you are able to take off your credit card. It can be a viable solution especially if you are in situation and need it, but remember to pay the amount off as soon as you can, so the balance is settled.

Choosing a Credit Card-What to Take into Account

Choosing a Credit Card-What to Take into Account

 

 

 

A credit card is a handy financial item to have but it can also cause problems if it is misused. You need to think carefully when it comes to choosing a credit card and what to take into account about credit cards.

As a business you will need a different type of offering and places such as SureSwipe can help you with your needs.

Before choosing a credit card, here are a few things of what to take into account.

1. Your Spending Habits

You need to consider how you will want to use a credit card. Think about if you will be able to pay of the balance each month or will carry a balance from month to month. Also are you looking at a credit card for emergencies only or to pay for various types of purchases?

         i.            If you know that you will pay the outstanding balance each month then you do not need to be overly concerned with the interest rate. You should try choosing a credit card that has no yearly fee and a long grace period.

       ii.            If you believe that you will carrying a balance each month then you need to find a credit card with a low interest and a low introductory fee.

      iii.            If you plan on making various purchases with a credit card then you need to secure a good credit limit as well as look for a rewards program. If you intend to only use it for emergencies then a low fee, low interest and no frills card is best.

2. Interest Rate

When you see a credit card offer the interest rate will appear as the APR which is the annual percentage rate.

This rate can either be fixed or variable which is then tied to a financial indicator which will generally be the prime rate.

A fixed rate will remain the same month to month. The fixed rate will only change when it is based on specific factors like paying the balance late or exceeding your limit.

A variable rate will rise and fall month to month, which means you may not know what to expect.

3. The Limit on a Credit Card

A credit card limit is the maximum amount of money that your credit card issuer will allow you to borrow.

The limit that is granted to you will largely depend on your credit history and credit score.

You can damage your credit score by maxing out your card and the limit can be lowered. This will also incur a penalty.

4. The Fees and Fines

You need to be aware of the fees associated with credit cards when choosing a credit card. The fees that you need to take into account are transaction fees like balance transfers and cash advances.

You can also incur penalties and fines if you pay your monthly payment late.

You need to consider cards that have affordable fees. You can find offers that have a 0% interest for a period of time and other such deals that you can take advantage of when choosing a credit card.

5. Balance Calculation

If you intend to carry a balance then you need to take into consideration how the finance charge is calculated.

A common calculation for this is the average daily balance. The daily balances are added and then divided by the number of days that are in the billing cycle.

If the credit card has two billing cycles then you should avoid these as you will be paying more.

6. Rewards

There are reward programs offered by credit card issuers. As long as you do not pay for the rewards in terms of charges these can be a nice benefit to you.

The rewards can vary from cash to travel. These rewards are earned on purchases that you make with your credit card.

When choosing a credit card these factors are what you should take into account before you agree to any credit card offering.

A credit card takes responsibility and managing so that you improve your credit score and pay your balances. It is not an item that should be taken lightly and you will need to think about it and how you will use it.

The most important factor is to understand the credit card and its terms so that you know what you are paying and what you will gain.

All Credit Card Types

All Credit Card Types

There are various types of credit cards so you will have to look at the type of card that you need if you want to get a credit card. In order for you to make the right credit card decision you should look at all credit card types. This will help you in knowing more about all credit card types and narrowing down which applies to you.

All Credit Card Types

1. Standard Credit Card

The standard credit card can also be referred to as ‘plain vanilla’; this is because these credit cards have no extras to them they are just a credit card.

The standard credit card will have a credit limit placed on them. When you buy something you will use the credit on the card so that you can buy it right then. At the end of the month you will need to replace the credit by making the due payment on your credit card. This will then make the credit available once more.

If there is an outstanding balance on your credit card at the end of the month, you will be charged for this. There is also a required minimum payment that has to be made every month on the date it is due. If you fail to pay on the set date you will incur a late charge.

2, Balance Transfer Credit Card

If you opt for a balance transfer credit card you will be offered a limited time only low introductory rate on balance transfers.

The offers for balance transfer cards vary in their interest rate and the promotional time period. The lower the rate is then the longer the time period is as they are attractive but you will need a good credit to qualify.

3. Rewards Credit Cards

The rewards credit card offers rewards to the user when they make a purchase with their credit card.

Generally there are three reward card types, those being:

·         Cashback

·         Points and

·         Travel

The type of reward you choose will depend on which will be more beneficial to you.

4. Student Credit Cards

As a student or a young adult you will most likely not have a credit history or very little, which is where student credit cards come in.

As a new credit card applicant it will be easier to obtain a student credit card than any of the others. These may also have additional perks like low interest rates on balance transfer and rewards.

 

5. Charge Card

There is no pre-set spending limit on a charge card but the full amount must be paid each month.

If you are late in paying the full amount you will incur a late fee, charge restrictions and even card cancellation depending on the card agreement.

 

6. Secured Credit Cards

If you do not have a credit history you suffer with bad credit then you can look at the secured credit card.

The card requires a security deposit to be loaded which will also act as your credit limit.

You will still need to make the payments for the card each month.

7. Subprime Credit Cards

The subprime credit cards are not a good choice however they are offered for those that have bad credit and are unable to obtain credit another way.

These cards have complex terms that may confuse you but they also have a high interest and pricey fees.

8. Prepaid Cards

A prepaid card is not actually a credit card and is not able to aid in a credit score but they can help you manage your finance.

In order to use a prepaid card an amount of money will need to be loaded on to the card which can then be used to pay for items. You will have to top up this card when there are no more funds. These cards also have no fees attached to them or minimum repayments.

9. Limited Purpose Cards

Limited Purpose Cards are used like a credit card but can only be used in specific locations. These do have finance charges and minimum payments that need to be made.

Limited purpose cards are store credit cards or gas credit cards.

10. Business Credit Cards

A business credit card is intended for business use. Business owners will get one of these cards so that they are able to separate business and personal transactions.

These are all credit card types that you can choose from. These cards will all work in credit card machines like those from SureSwipe.

Credit Card Processing Terminals

Credit Card Processing Terminals

There are several ways that credit card transactions can be processed as merchant services will offer various types of credit card processing terminals like SureSwipe in South Africa will have what you need in regards to credit card processing terminals.

You will need to look at the various credit card processing terminals so that you are able to see which one of these is best for your business.

Online Credit Card Processing Terminals

An online credit card process uses a website in order the sell the products and services that the business is offering.

These online sites will have a shopping cart feature where items can be added into on the site. The shopping cart allows customers to quickly and easily purchase their goods.

If your offer your products online then you will obviously choose this option so that the goods can be paid for by the customer with their credit card.

Credit Card Terminals

A credit card terminal is where customers will swipe their credit card through the card reader so that their information is read through the magnetic strip.

You will often find the fixed terminal which is one that is placed at a cash register for instance at a fixed point. The other is a portable terminal that does not have to be plugged into a specific point. This device can be taken to the customer so that they are able to pay for their items. These work well in restaurants.

There are also terminals that are called tap and pay. Customers will tap their card to make a transaction. The cards are read when they have Radio Frequency Identification or RFID chips inside of them.

The credit card terminal will either use a telephone line, an internet line or broadband and Wi-Fi.

Mobile Processors for Credit Cards

A mobile terminal can actually be plugged into a mobile phone or mobile device. The credit card is swiped through the terminal which is then processed using the mobile devices internet connection.

There are also apps that can be used on the mobile device so that the merchant can type in the credit card information so that the transaction can take place.

These are ideal for mobile companies that may visit the customer’s place of residence.

Manual Credit Card Processing

This is how it sounds and processes transactions without electronic devices. Manual credit card imprinters used to create a copy of the credit card. However this is a very outdated form of credit card processing and will rarely be seen in action.

These credit card processing terminals are different and the one that you choose will depend on the business that you have so it is able to run efficiently.

 

How to Avoid Credit Card Skimming

How to Avoid Credit Card Skimming

Your credit card is precious to you so you will very rarely let anyone else touch it so then how it is possible for people to get your credit card details. Thieves use a device called a Credit Card Skimmer.

A credit card skimmer is a portable device that is able to capture card data.

The credit card skimmer is attached to the front of or on top of a legitimate scanner.

These credit card skimmers will often be placed on a device at a petrol station, at ATMs or other terminals that offer convenient self-service point of sale terminals.

Skimmer technology like most other technology has advanced over the years. There are skimmers that are able to capture your card information and a small camera will record you typing in your pin,

There are also some that will place a second keypad over the actual keypad which will then capture your pin number.

The other side of skimming is actually at point of sale terminals which are actually conducted by employees who use hand held skimmers or fraudsters who swap the actual POS device for one that have been tampered with to skim and transmit the data from the card.

As the technology improves you need to know how you are able to avoid credit card skimmers.

How Can You Detect and Avoid Being the Victim of Credit Card Skimming?

Inspect the Card Reader and PIN Pad

Banks and merchants are aware of the skimming scams so they may have a picture of what the device that you are using should look like so that you are able to identify any changes.

You can also educate yourself as to what skimmer devices look like so you know what you are looking for.

As skimmers are only temporary have a look at the device and if it doesn’t look like it matches the machine in terms of colour and style then you might be looking at a skimmer.

Machines like those from SureSwipe will show you how each of your devices should look as a merchant and how they work so as a merchant you can also spot skimmers if the point of sales is not fixed. They also offer support if you are a victim of fraud.

Look Around

You should look at the other devices that are near to the one that you are using to see if they are the same. It is rare that skimmers are skimming all the devices around you and will generally just target the one device.

Trust Your Gut

We will actually be able to notice when something is out of place instinctively. If you sense something is off about the credit machine you are using then rather use a different one.

Check Your Accounts

If you are worried that your card has been skimmed then you need keep your eye on your account balance.

If you notice anything that is off then you should report it to your bank immediately.

In order to avoid credit card skimmers you just need to be aware. If you notice anything wrong on the device that you intend to use then avoid the machine altogether instead of taking a chance.