Ramanisblog

Tag: Payment

  • Manage Credit Card to Your Advantage.

    I have seen my daughter manage her  Credit Card very well.

    She ensures that she gets full value of the benefits promised.

    She goes through the fine print carefully.

    Pays before the Due date.

    Keeps track of the Reward Points accruing to her, en-cashes them in time.

    Selects products/out lets where she will get the Best Buy.

    She is loyal to a particular Credit card.

    I may add the following points as well.

    Do not leave the card to a waiter or gas Station Attendant to effect payment.

    Personally handle the transaction and see that the  Decoder comes to normal settings before you leave.

    Do not enter the ATM’s when it is crowded; if possible enter when it is empty.

    See to it that the ATM Screen flashes Home Screen before you leave.

    Ask for balance statement only if you must.

    Never leave your balance slip in the ATM kiosk.

    Now read on for Professional advice.

    Credit Card.

    Still, the fine print of how to use credit cards remains a mystery for many. Every year, hundreds of credit card users complain about being charged excessive fees or about receiving abusive calls if they haven’t paid their credit card bills for a long time. Complaints from credit card usersreportedly topped the list of grievances handled by India’s central bank between 2009 and 2010.

    Banks and card issuers give users all the information they need in the “terms and conditions” that come with the cards. But consumers tend to overlook the fine print and largely rely on what the credit card salesperson tells them at the time of purchase. And they are unlikely to draw full attention to the many catches, preferring to focus on the positives of owning a credit card instead.

    Ultimately, it’s up to the credit card users to know what they are getting into. Here are five things you should know about your credit card that you are unlikely to hear in a sales pitch:

    The long list of fees: Understanding the credit card statement seems to be a major hurdle, said Jairam Sridharan, head of consumer lending and payments at Axis Bank in Mumbai. “I don’t understand how you calculated the interest or fees’…this is the most common problem people face,” he said. So make a point of finding out what all the charges are in advance.

    If you are offered a “free card” or one with no annual fees, make sure the fee doesn’t kick in after the first year or two. It’s also a good idea to find out whether there are joining fees and how much you’d have to pay for late payment charges, cash advance charges (applicable on withdrawals from an ATM), and charges for spending more than your credit limit.

    Some of the highest fees are charged when you don’t pay your credit card bill in full by the due date. You may have to pay an interest of up to 42% on the unpaid amount, plus a service tax of 10.30%. You may also lose your interest-free period for the next cycle if you haven’t cleared all your bills in time.

    In case you haven’t even paid the minimum amount due per month to the credit card company late payment charges will be levied. These are typically 500 rupees ($10.5) to 600 rupees foroutstanding amounts of 10,000 rupees to 20,000 rupees. For greater amounts, the fee is higher.

    If you use your credit card to withdraw money from the ATM, you may have to pay your credit card company or bank 3% of that amount, or a minimum of 300 rupees ($6.3), plus interest.

    Why your credit card matters for your car loan: Did you know that your chances of getting a home or car loan depend on your credit card usage? If you didn’t, now you do.

    Here’s why: The credit card usage of individuals in India is tracked by an independent agency that prepares a “credit score” for each individual. This score is basically a snapshot of your credit worthiness, a high score showing that you are highly likely to pay back your loans and a low score that you are not. The credit score, drawn up by the Credit Information Bureau India Ltd., is based on factors like how promptly you pay your credit card bills and how many cards you have. Consistently late payments or too many cards would result in a lower score. The credit score ranges from 300 to 900 and is constantly reassessed.

    “When you apply for (home or car) loans, your Credit Card Information Report and your score are very critical elements and indicate your financial discipline,” said Arun Thukral, managing director at CIBIL.

    To keep your score high, “avoid spending closer to the credit limit,” said Parag Rao, a senior executive and head of the credit card division at HDFC Bank Ltd. “A credit card should not become a means of financing your day-to-day finances,” said Mr. Rao.

    http://blogs.wsj.com/indiarealtime/2011/09/16/five-things-you-should-know-about-your-credit-card/

    Related;

    As a business owner, you should understand the importance ofcredit card processing or a merchant account. It doesn’t matter whether you operate your business in a physical location or over the internet, your customers want to pay you with credit and debit cards.  For internet based businesses, however, if you don’t accept credit cards you may as well not bother.  Who wants to go through the hassle of mailing a check or money order when buying something online?

    Here are some general tips to help you avoid problems with your merchant account or payment processing providers:

    Setting Up a Merchant Account

    Most online business owners use online merchant accounts to process credit cards.  Do not wait until you need to process a credit or debit card to set it up because it can take a few days before your new merchant account is usable.  Online credit card processing is generally faster to set up than traditional bank merchant accounts, but it’s rarely instant, and you want to be prepared.

    Review and Understand Your Credit Card Processing Fees.

    http://www.creditcardprocessing.net/general-online-credit-card-processing-tips/

  • Demand Drafts to be Paid Immediately and other Guidelines-RBI

     

    All of us are aware that Banks ask us to wait for ‘ DD clearance’ for payment of Demand Drafts issued in our favor.

    Some clear it within a couple of days while some others take even a week.

    When demanded forcefully like asking them to give in writing that they are awaiting DD clearance  before they pay out, you are paid immediately.

    Demand Draft means..RBI definition is here below.

    By  definition the Banks should immediately release funds with out waiting for clearance.Banks levy a charge for DDs  for this facility, which is higher than Checks.There is no logic in waiting for clearance.

    Curiously RBI is silent on this issue.

    You may use the following links for guidance for  ALL your Banking transactions..

    http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=508

    http://www.rbi.org.in/scripts/FAQView.aspx?Id=51

    Sl. No

    Term

    Details

    Cash

    Cash payment is the most common payment system which is well known.

    Cheque, demand draft, payment order, banker’s cheque

    Paper based payments are in the form of cheques, demand drafts, payment orders, banker’s cheques, refund orders, warrants etc. These are also referred to as negotiable instruments. For simplicity, they are generally referred to as cheques.

    i. Cheques are simply a payment instruction from the account holder to his/her banker directing that a certain sum of money should be paid to a specific individual or to the bearer of the instrument. On receipt of cheques, the beneficiary will deposit it with his banker who will collect the money through clearing house system, where banks in a city exchange cheques with one another and settle the payments by arriving at a net amount of payables and receivables. After exchange of cheque, the account of the issuer of the cheque is debited and the credit is passed on to the banker of the beneficiary. An account holder should ensure that a cheque is issued only when there is sufficient balance of funds in his/her account. Cheques drawn on any bank in the country can be cleared through various mechanisms available in the clearing system. The process usually takes 2 to 4 days depending on the local clearing house procedures.

    In India, cheques are valid for three years from the date of issue. However, cheques are treated as stale, by practice, by banks after since months from the date of issue, but they can be revalidated by the issuer. Dividend warrants and interest warrants issued by companies are also treated as cheques which are usually valid for three months from the date of issue. In case of a cheque, the beneficiary is entitled to receive the money due only if the balance is available to clear the cheque. However, there are some pre-paid negotiable instruments eg. Demand drafts / payment order / banker’s cheques.

    ii. Demand drafts are used when one person wants to send or transfer money (remit) to another person who is in another city. The person wanting to send money, deposits cash in a bank or issue a cheque in favour of the issuing bank, which issues him a demand draft. The demand draft is sent to the person who is to receive the money. The receiver gives it to the branch/bank where he holds an account and receives the payment. They are valid for 6 months. Banks normally charge a commission for issuing demand drafts.

    iii. Payment orders or Banker’s Cheques are similar to demand drafts but are usually issued for payments within a city. These are usually valid for 3 months. Banks may charge a commission for issuing Payment Orders and Banker’s Cheques..

  • Credit Card processing-Lose money?

    No Credit Card
    Image via Wikipedia

     

    Do not spend what you do not have at present.

    Story:

    Usage of plastic money is in vogue as these are accepted by almost all of the merchants. It has become an everyday necessity rather than an item, which should be used for emergency purposes. As per reports on average very American household, have around 14 credit cards. Shopping with credit cards is apparently a very easy affair but it is wholly complex issue ones your merchant swipes the credit card at the Point of Sale or POS. Credit card payment processing is in fact an intricate process. This can even result in huge amounts of debt, which you may not be able to control. You may not even get free money to pay off debt and become free of credit card debt.

    How credit card payments are processed?

    When a customer pays for the items and the products, he has purchased, using a credit card, the merchant swipes the card at the entry line of the Point of Sale or POS unit. POS units are specially designed for credit cards. However, you need to keep a close watch on the amount that is being drawn by the merchant so that you are not required to pay more than what you owe to the credit card company. You should check the purchase receipt for any disputes. Or else, you may incur huge debts, which you may not be able to handle.

    What are the credit card payment processing trends?

    Some of the trends in credit card payment processing for the year 2011 are:

    1. Cell phone carriers will attempt to introduce new mobile credit card processing – Major cell phone companies like AT &T, Verizon, and T-Mobile have been considering on the steps to implement a new kind of technology that may be able to allow the customers to use their cell phones to make payments for payments. They will have to hold the phone in front of a compatible card reader instead of swiping the credit card. This technology is already there in Europe and Asia. It is however not that much clear how much will the merchants be billed for these kinds of transactions.
    2. Merchants are still going to suffer from unfair chargeback’s and breaches of data – Throughout the last year (2010), according to reports, many of the customers have scammed the merchants by talking to their credit card companies to dispute the legitimate sales after the buy. This trend is predicted to continue, as there are no proper ways, which will be able to solve this problem. Mainly, the credit card payment processing industry has still not shown any initiative to change this scamming trend or have not taken any initiative to punish the cardholders providing false disputes.

      3. These incidents prove to be costly and the businesses were thus forced to pay tens and thousands of dollars to rectify these breaches. As a result, other customers too are suffering as the merchants are increasing the price to cope with the breaches.

    3. Significant credit card interest rate increases are going to occur – With the passing of the Credit Card Act and the other Financial Reform last year, many businesses are going to charge high interest rate from the beginning. Moreover, though the credit card companies cannot increase the interest rate on existing credit cards whenever they please, there has been no mention about a cap on the increase in interest rate after any breach of contract by the borrower. He credit interchange related fees too are going unchecked.

    So, you should be aware of the terms and conditions of the credit card before signing up with one. You should also avoid making late payments so that you don’t incur huge debts as free money to pay off debt is not always available.

    http://www.creditcardprocessing.net/credit-card-processing-trends-that-may-impact-americans-in-2011/