Demystifying Credit Card Jargon

Credit cards have become the way of life in the U.S. and spurred the country’s economy.

Credit card spending increased tremendously for the past 13 years. According to a report from Federal Reserve in April, outstanding revolving credit reached an annual rate of $870.44 billion or a rate of 12.3 percent.

This marks a surge in increasing consumer confidence and a willingness of banks to open their doors to lending and other financial solutions to both consumers and retail business. Either way you look at it, this is a big boost in the retail industry where many consumers will eagerly go to not only for their needs but also for a few luxuries they can enjoy.

credit cards

Most individuals will know the basics of credit card processing, but as retail owners, knowing the ins and outs of credit card processing is now more important than ever. This is especially true if you are joining the fray of retail industry. One needs to be well-versed with the workings of credit card procedures as your buyers are likely to use this payment method more often. You will never know when a glitch happens or an error occurs.

If these instances are not attended to immediately, you don’t need to guess what the repercussions could be to your new business, especially as you know you are starting to create a name and reputation in the area.

It is during a transaction where credit card processing happens. Here are a few credit card terms you will need to get used to dealing with in the course of all these transactions.

Sale Transactions

This is the type of transaction you want to see happening a lot in your business. It is the ideal scenario where everything goes well in the transaction and you can consider this a complete or closed transaction. As soon as the buyer is ready to pay for their purchase and supplies their credit card for you to process, the money gets transferred to the account under the merchant.

Pre-auth and Post-auth

Pre-auth is generally a transaction where a small amount, usually a dollar, is placed on hold on the card. No money is transferred in this instance and the amount can be released after the card has been verified and confirmed as a valid credit card. Likewise, no money is transferred during post-auth transaction.

As the term implies, post-auth occurs when a buyer purchases a product before it is shipped. Also, the amount is initially put on hold or reserved on the card, effectively deducting it from the customer’s actual credit limit. Once the product is shipped, post-auth can be performed and the amount on hold or reserved is transferred to the merchant to complete the sale.

Chargebacks

Chargebacks occur when a customer starts disputing a charge made against his or her credit card.

This exercise is tedious but you will need to be aware of how this works so you can attend to it properly.After customers receive their credit card bills, they are given a few days to review the amount charged on their cards and be able to dispute amount that may have been erroneously placed on their credit limit.

This can happen when a supplementary card holder fails to inform the card owner about charges they may have made on the card, a customer forgets making the purchase or it could also be charges made on a lost card. When this happens, the bank will move to withdraw the disputed amount back to the consumer’s account from the merchant.

You, as the merchant, are given ample time to produce proof or record to justify the amount billed against the customer’s credit card. Once the bank is satisfied with the evidence provided by the merchant to support the disputed charges, the same amount is transferred again from the customer’s account back to the merchant.

For every chargeback, the merchant’s bank may also bill a small amount and this depends on the bank’s existing rates at the time. It is important to make sure that you have records of these purchases to support such claims, should the need arise in the future.

Credit

Credit came from the Latin word ‘creditum’ which literally means “that which is loaned or entrusted.” Credit is about transferring the money from the merchant account to the customer’s account. It is the opposite of the sales transaction and when you look at the balance sheet during accounting, it will come out as a negative.

Students: Do This One Easy Thing to Make Money

College is the time for making new friends, learning about yourself, and picking up marketable industry skills to make you successful. So, when you’ve got a busy schedule, how exactly are you supposed to fit in earning a living? If you like walking and paying attention to details, metal detecting might be the hobby for you!

coins on ground metal detecting

Not only is it a great group activity or cheap date, metal detecting can also be quite lucrative! You never know what you’ll pick up, or where your next find will come from. It’s an adventure that can make you some quick cash:

How to Get Started Metal Detecting

The best way to get started with metal detecting as a hobby is to rent a metal detector. Purchasing one can be very expensive, and if you’re not sure you’ll love it, it could be a waste of money.

Start by finding a Rent-a-center or local renting shop to see if they have a selection of metal detectors. Then, take one out for the day to see if it’s a fun way to spend time.

What to Look for While Detecting

While metal detecting can obviously be used to find loose coins and other valuable items, it can also open you to a world of historical preservation. Many metal detecting clubs are based on the premise of finding, protecting, and preserving historical items before they are lost to construction and misplacement.

If you go to college near a historical site, it’s possible that you can be a part of preserving history, too! Just pop by your college’s history or archaeology department with your find and see if it is helpful.

Best Places for Metal Detecting at College

The theme of metal detecting may as well be “Finder’s, keeper’s!”. Often the best finds are long-lost change and jewelry lost in gutters, fields, and other hard-to-search areas. If your college is nearby a beach, that’s also a prime location for finding valuables.

Not sure if you’re comfortable with keeping or selling other’s valuables? Post generic details of your findings on Craigslist or the college newsletter to allow the rightful owner to come forth — then profit, guilt-free!

Have you ever gone metal detecting?

Should You Take On Student Loans? How Much is Too Much?

We have been told by our parents, grandparents, aunts, uncles, and friends that college is a necessary part of life if you want to succeed.

Whether you agree with that or not, chances are that you are attending college just in case. The second dilemma you should be contemplating is your future debt load.

should i take out student loans

I have heard countless stories (and I’m sure you have too) about students that graduate from college with a worthless degree and have amassed tens of thousands of dollars in student loan debt in order to get it! Now that they’ve graduated, they have no job, no money, and absolutely no way to pay back those loans. So should you even take on student loans? How much is too much?

To Beg For Loans or Not to Beg For Loans? That is the Question.

There are many students that don’t think twice about taking out student loans. They were told that if they get a college degree they will be successful, so why stop to think about student loan debt? Hopefully this is not your mentality. Debt can be a tool for gaining wealth, but is more often than not a disease that will keep you poor. Be very careful with debt, even student loan debt.

So when are student loans ok? Here is how I measure the validity of your student loan usage:

• What is the average yearly salary for your desired position?
• What are the odds of you landing this job?
• Take the average salary and multiply it by the percentage of you landing the job, and then multiply by 50%.

So, if you are going to college to become a teacher, do some research and find out what the average teacher salary is in the first couple years. Let’s say it’s $35,000. Then, what are the odds of you finding a teaching job? With your internships and good grades, you figure that you have a 95% chance of landing a teaching job.

$35,000*0.95*0.50 = $16,625 of student loans

In your four (or five) years that you are in college, you should not exceed a total of $16,625 in student loan debt. By keeping your student loans this low, this will provide you the opportunity to pay off your entire debt within the first five years of work. If you acquire more debt than this, you will no doubt be strapped for cash for many years.

In reality, if you can find a way to get through college with absolutely no debt, this is the best option. Work extra jobs, eat cheap food, live at home – do whatever you can to keep your expenses low and your income high (you know, high for a college student).

If you succeed at earning your degree without any debt whatsoever, you could become a very wealthy individual. While your friends are making house payments, car payments, and student loan payments, you will be smiling at your full bank account. Instead of getting yourself into debt, invest in assets that will produce money for you in the future. This is how you become financially successful in life.

Do you have student loan debt? Do you wish that you would have worked harder to avoid it?

This guest article has been written by Derek Sall from LifeAndMyFinances.com. Derek has a great passion for helping people get out of debt, save up money, and become wealthy!

Look for Love, but Commit on Money

This title just sounds absolutely terrible doesn’t it? First of all, should “love” and “money” even be in the same sentence? It just doesn’t seem right, and certainly isn’t romantic, but it is, in fact, realistic. Love is powerful, but many marriages end because of money, so it is important to yes, fall in love, but be certain that you are on the same page when it comes to money, and then commit to a lifestyle that you will both be happy with.

college girlfriend and money

It’s Honestly Hard to Tell at First

When you’re in college, it really is hard to tell who is a spender and who is a saver because virtually everyone is broke! If you had $100 in your account and I had $5 in my account, would you automatically say that I must be a spender because I have less money than you? Of course not. The difference just isn’t large enough to make that determination.

This is the same problem students come across when they find their “soul mate” in college. The expectations are quite little because the girl knows that the guy has hardly any money, and the guy knows the same thing about the girl, so they are just content to have picnics in the park or go for a walk downtown. Their time together is exciting and magical – they just can’t wait to graduate and find some jobs so that they can get married.

The Spending Patterns Change

Now that you both have jobs and are pulling in nearly $100,000 a year, the spending patterns are really starting to change. You might be a saver by nature and you would like to take the extra money and put it away in savings for an emergency or a future opportunity. However, there is a strange thing going on. Even though you both are earning more money than ever before, there are no savings. All that money that comes in each month is just vanishing by the time the month is over. It turns out that your spouse is a spender.

Learn About Yourselves Before Making That Big Commitment

Again, it is not romantic to talk about money, but boy is it ever important! Ask your special someone what they would do if they had $20,000 dumped into their account today. If they immediately start rattling off something about fancy cars and expensive restaurants, then you are no doubt in a relationship with a spender. If, however, they sit there quietly for a moment and ponder the situation, and then begin to speak of a savings and investments for the future, then you have your hands on a saver and long-term thinker.

If you believe that it is important to save money and invest for your future retirement, then you had better be with someone that has the same money values (and then commit to those). If your money values do not align with your future spouse, then there will be some rocky terrain ahead – be ready.

Feel free to talk about money with your significant other and agree on your future plans together. If you have a love for one another and can agree on the major values of life, then your relationship will likely grow stronger and stronger, and that is a beautiful thing.

Are you ready to discuss money with your significant other?