Tag: banking

Categories
banking

Sallie Mae Debit Card Is A Helpful Convenience For Students, If Handled Responsibly

The student loan company Sallie Mae is preparing to release a student debit card in partnership with Mastercard. The new program, which will start this summer, allows students to receive financial aid money and tuition refunds in a special checking account.

Sallie Mae Debit Card Features

Perks of the accounts include:

  1. A free checking account (Here is a Sallie Mae savings account review).
  2. More efficient receipt of money. Students can expect to receive a refund the day it is issued rather than the typical two- to three-day bank lag.
  3. FDIC insurance on deposits.
  4. Surcharge-free withdrawals at 35,000 ATMs nationwide.
  5. No minimum account balance.
  6. The card will not allow the user to overdraw.

Saves students money. The new Sallie Mae debit card will save students money in the long run, especially compared to some of the main competitors in the space. With the new accounts, Sallie Mae is challenging Higher One, its main rival in student payments. Higher One runs a similar program but only has 600 fee-free ATMs. It also charges fees for PIN-based transactions.

Faster and safer for financial aid refunds. Sallie Mae’s move comes in time to comply with new rules taking effect in July requiring universities to refund unused financial aid money in 7 days instead of 14. In addition refunds and other transactions can be handled electronically, which is faster and safer than other types of financial transactions.

Added convenience. The cards will be convenient for students and provide an incentive to borrow from Sallie Mae. But with financial aid money in hand, they will need to be extra careful not to spend it carelessly since, for most students, it will need to be paid back with interest eventually.

A great option for students. Overall, this card is a solid option for students, since they will have added convenience, free checking, many fee-free ATM options, FDIC insurance, no minimum account balance, and the inability to overdraw their accounts.

Categories
banking

Top 5 Things to Consider When Shopping for a Home Safe

When a tragedy strikes, will your meaningful belongings and documents be protected? It is never too late (or early) to add a safe to your house. Burglary, fire and floods are all variables that cannot be controlled however; you can do something to ensure that at least irreplaceable items and important documents will not be lost forever. Any size family and home can find a safe to fulfill their needs by considering the following five things.

What you need to consider for your home safe

1. Content – What do you intend on keeping in your safe? You should know that not all safes are created equally and certain styles are designed to be more protective of certain items. For example, Gardall safes are available in models that are specifically designed for firearms which is crucial, especially if you have children in your home. Different models of safes are even made from different material so considering whether you will primarily be storing documents, money, valuables, media files, firearms or a little of everything will help you choose the right safe for you.

2. Locks – What type of lock will you be most comfortable with? Most safes and safety security boxes come with a standard lock but some allow you the option to either change it or add on another lock for more security. Key locks are popular and if you happen to lose your key, most companies can send you a new one. Combination locks are quite common as well are are a preferred choice, alongside a key lock when double protection is desired. Lastly, electronic locks empower you to program different combinations for multiple users and you can change these as needed.

3. Location – Where is the best place for a safe to be stored in your home? Some models are free-standing that can be hidden in a closet, pantry, etc., or there are those that are installed in a wall or the floor of your home. These provide an added security feature of being able to hide them.

4. Waterproof – Do you need your safe to be waterproof? For many people, this is a top concern if they live in an area prone to flooding and hurricanes. However, water damage can occur regardless of where you live from roof damage, frozen pipes that burst or just a freak of nature. More and more catastrophes are happening today that are blamed on the weather that no one is prepared for them.

5. Fireproof – Is your primary concern with fire protection? A fire can happen to any home at any time and there is never the chance to gather your important belongings and get your family and pets out of the house. There are some safes that are designed to keep the contents of your safe cool for as long as two hours so when the fire is put out, you will find everything inside unharmed.

Buying a home safe should be a priority on the list of everyone. There are many sizes to choose from with various features so use this guide to help determine the kind of safe that will best fulfill your needs.

Categories
banking

American Express Getting Into Debit Market

American Express has always been the most mysterious credit card company. Besides the fact that many establishments don’t accept the gold and black card, their presence in the debit market has been non-existent. As the companies first step in the wide world of consumer debit, American Express opened last week a new product called Serve.

The Serve web site is a prepaid electronic wallet, where consumers can access and transfer money through smartphones and computers equipped with Visa Inc., MasterCard Inc., and PayPal Inc. Consumers can go to the website on their phones and download an application for iPhones, iPads and Androids. Blackberry will have access to the technology later this year.

There is no initial cost for opening an account with Serve. Also, deposited funds don’t expire, nor is there a minimum balance required. Refusing to use a debit method attached to checking accounts sets American Express debit cards apart from Bank of America and JPorgan Chase & Co. debit cards which will likely see balance minimums and ATM fees due to the Dodd-Frank Act interchange fee cap.

Serve.com account holders will receive plastic cards linked to their electronic wallets. The Serve logo is on the front of the card, and on the back is a blue box that explains which merchants and consumers that it may be used at. Customers using the card will get one free withdrawal a month from an automated teller machine and be charged $2 for each subsequent withdrawal.

Debit cards are becoming the most common form of payment. According to Bloomberg, global consumer spending and cash transactions on Visa and MasterCard debit cards climbed 20 percent to $3.95 trillion last year. In the U.S., spending on debit cards rose 15 percent in 2010, compared with 6.3 percent for credit cards, according to the Nilson Report, an industry newsletter.

With a recent partnership with the social network FourSquare, American Express has made headway in exploring digital markets. Last year, American Express spent $305 million to buy the Internet-based payment processor Revolution Money, which is the tech foundation for Serve.

There’s no charge for using debit cards or checking accounts to fund a Serve account. Fees for funding accounts with credit cards have been waived for the first six months. After that, AmEx will charge 2.9 percent of the transaction total plus 30 cents, which is competitive with PayPal’s pricing, said Joanna Lambert, an American Express spokeswoman.

Customers can shop online without being required to enter sensitive information, such as a credit-card number and mailing address. They also will be able to send money person- to-person in the U.S. by entering a PIN number and the recipient’s e-mail address. The latter feature will be available worldwide later this year.

Categories
banking

Debit Card Transaction Limits and $5 ATM Fees

Banks are hurting right now and are doing everything in their power to continue minting the kind of money their shareholders expect. Due to changes in legislation, some banks are considering limiting the size of debit card transactions. Chase Bank recently announced they are considering capping debit card transactions at $50 or $100 to protest government regulations which place a cap on interchange fees. The cap will limit interchange fees to $0.12 per transaction, which could cost Chase up to $1 billion in profits each year. They claim it will no longer be profitable for them to continue making these transactions at such a low cost.

Chase has already ended their debit rewards card program, which was a very popular program. Ending it, and potentially limiting debit card transactions to $50 or $100 has the potential to destroy Chase’s banking business, as many customers will look to go to banks with a more generous online banking program.

$5 ATM fees. Chase is trying out $5 ATM transaction fees on a limited basis in Illinois, and $4 ATM fees in Texas. They want to monitor how many people are willing to pay these higher fees, and if they are still profitable, they will be rolled into more markets.

Other banking fees. We’re not picking on Chase, I promise. We are just highlighting them because of how frequently they have been in the news within the last week or so. For example, Chase is also testing out additional fees including a $3 per month debit card fee, and $15 per month fee to have a checking account.

The big problem is that banks are like the airline industry – where one goes, others will follow. It’s not good news for consumers as most banks are only considered with making their shareholders happy. In the end, we suffer, while they make more money.

What can consumers do? The best thing you can do is put your money where your mouth is. If you have a problem with the fees banks are charging, let them know. If the banks continue to charge high fees or won’t waive the fees, then walk away. It’s as simple as that. There are plenty of great banks which would love to have your business. Here is a list of free online checking accounts, which don’t have minimum balance requirements and offer ATM access at thousands of locations. Why keep your money with a bank that will charge you too much money just for the pleasure of doing business with them?

Categories
banking

Why Certificate of Deposits Are One of the Safest Places to Put Your Money

Volatile markets, falling home prices and an unpredictable economy are all reasons for one to be concerned about the safety of one’s money. If you are seeking to keep your assets protected, then I suggest using Certificates of Deposit, or CDs, as one of the safest places to keep your money. There are several reasons for this:

  • Insurance – If you open a CD with a FDIC insured bank your money is protected up to $250,000, up from the previous limit of $100,000. Just as with a savings or checking account if that bank should fail the federal government will make sure that all customers will get back their money up to that limit. There are no such guarantees with stocks and bonds.
  • Guaranteed Return – A Certificate of Deposit often comes with a fixed interest rate that is higher than a regular savings account and that can outperform stocks and mutual funds in a down market. There is no guessing at what your return will be at the end of you CD’s term. It can be calculated and you can plan on having that return on your investment.
  • No Broker Fees – Setting up a CD is just like setting up any other bank account and does not carry with it any origination or maintenance fees. Unlike a brokerage account there is no need to pay someone to keep looking at your assets, changing their allocation and charging you for the privilege.
  • Low Risk – Real estate has climbed and fallen over the past ten years. During that same time the stock market has been flat. Even bonds do not have the return rates they used to. Investing in any of those three over the past decade could very well have resulted, and for many did result, in a significant monetary loss. By contrast a CD would have continued to earn money during that same time period. The low risk of CDs can make it a wise portfolio investment during uncertain times.
  • No Monitoring – Once opened the CD takes care of itself. There is no need to fret or to pore over you monthly statement. Just sit back, wait until the end of the account’s term and enjoy the return.

Some may assume that uncertain times are when risks should be taken. But some investors are looking not for risk but safety. If so then a certificate of deposit is one of the safest places to keep your money.

Categories
credit

New Unemployment Debit Card Costing Consumers

We are a part of a debit nation. Cash and checks are becoming more and more obsolete. Now days, we turn to debit for everything from daily purchases to disability benefits, and now unemployment payments.

Over 30 states have made commitments to begin issuing debit cards for those on unemployment. Deals have been made with Bank of America Corp., JP Morgan Chase and US Bancorp.

Wyoming is one of the latest states to hop on the debit bandwagon. High unemployment states such as California and Florida are looking to implement the system by the end of this year. While it may seem like a good idea, most consumers seem to prefer the snail mail method, as transferring payment via debit card has been costing consumers more than they’d like.

Programs vary by state, but consumers are generally charged $1.50 ATM withdrawals, and 50 cents for bank calls.

In some states those receiving unemployment benefits are required to use the prepaid debit cards, while other states provide other payment options. Some banks charge overdraft fees of $20 instead of preventing charges exceeding the balance of the prepaid debit card. In Pennsylvania they charge for lost debit cards, contacting the call center, checking card balances, making withdrawals and balance inquires.

While many consumers believe that the fees are illegal. The U.S. Department of Labor allows the fees as long as the states allow consumers to get the money for free. Consumers can get the money for free if the use the debit cards for all purchases or withdrawal all the money one time, according to Suzy Bohnert, a Department of Labor spokeswoman.

Joan Evans the Workforce Service director in Wyoming encourages consumers to use the debit cards, as they are a better way to serve clients, as they don’t have to wait in line to cash their checks. “The individual decides how to manage his drawdowns using the debit card,” she said.

“If you use your card the right way, you shouldn’t have to pay fees at all,” a representative at www.Credit-Land.com said. “The goal is to make it easier for consumers to access money and give them greater ease at purchasing in an Internet world.”

But the consumer consensus is in – saving 15 minutes of their time waiting in line is not worth the penalties.

Categories
banking

Essential Treasury Management Services

What is treasury management and why is it important for your business?

Treasury management is a generic term used to describe popular banking products and services for businesses and non-profits.

Treasury management, also known as cash management, allows organizations to easily control cash flow in an efficient and effective manner, while staying up-to-date with financial statements and collections. There are many tools available, and there is not a one-size-fits-all approach. Hopefully, this article be a valuable resource as you research what banking tools are best for your organization. This is by no means an extensive article, and further research should be done before deciding on your banking solutions.

What are the most popular treasury management services?

Direct Deposit of Payroll:

Direct deposit is quickly becoming the norm for medium to large organizations. This service expedites the paycheck distribution while also providing enhanced security. Instead of mailing out checks, the bank or credit union involved will electronically deposit the funds into your employees financial accounts. It is a great time-saver and should be considered by any business with employees.

Positive Pay:

Positive Pay was developed to eliminate check fraud for organizations. Your financial institution will only pay for checks that match your company profile (i.e. check serial numbers and dollar amounts). If a check written in your company name does not match up with the above criteria, then you will be alerted, or the bank will simply refuse the check depending on the type of positive pay in place.

Merchant Services / Credit Card Processing:

If you are a brick and mortar shop or an e-commerce only business, you will likely need merchant services. This service allows you to accept payments from all major credit and debit cards. It also allows your to automate reoccurring billing. Usually financial institutions offering this service will also provide point-of-sale (POS) equipment and a loyalty card program. Make sure that before you choose merchant services provider that you understand all of the fees associated with credit card processing.

Other Treasury Management Tools:

If you are seriously considering banking services for you business, you may also want to research Bill Pay, Remote Deposit, Wire Transfer, Sweep Account Services, Bill Pointe, Business Checking, and Automated Clearing House.

In conclusion, make sure that you do your research before deciding on your business-banking partner, so that you get good rates and state-of-the-art equipment and services. Also, understand that every business has different banking needs. If you are small “Mom and Pop” shop, you might not need half of the services listed above; however, if you are a medium to large corporation, it is probably essential for your organization to have the best of these services because of the security, efficiency, and reporting available.

Categories
credit

Why Every Small Business Needs a Merchant Account

If you have a small business or even run a website on Ebay, then a merchant account may give you the ability to process credit cards and debit cards, which gives you the convenience of never having to turn away a paying customer because you can’t process their payment. There are many companies that offer merchant accounts for businesses. Below is some information on what it actually is and how you can sign up with a provider.

Why every small business needs a Merchant Account

A merchant account is essential for any company that needs to process credit or debit card payments. Not anyone can open a merchant account – only legitimate business organizations with suitable qualifications can open a merchant account. Because society is quickly moving to a cashless monetary system, you are leaving sales and income on the table if you don’t have the ability to process debit cards and credit cards for your small business – especially if you do business online!

Where to get a Merchant Account

Small business owners can get a merchant account from independent sales organizations (ISO), or member service providers (MSP), and merchant banks. Merchant banks are different than your standard investment bank because they make investments in small businesses with their own capital. ISO’s and MSP’s are licensed and accredited brokers of credit card services which maintain contracts with banks to process and handle credit card and debit card transactions. These independent companies provide various services to vendors including debit and credit card processing equipment, product sales & client service, settlement management, paper storage and other essential business services. North American Bancard for example, is a company that provides all these services.

Before selecting your merchant account provider you should confirm the independent sales organization’s credentials. A qualified ISO must be accredited and sponsored by a verified financial institution and all affiliations must be declares on all legal documents. One tip is to verify the ISO you choose is sponsored by an FDIC insured financial institution.

Businesses should also compare costs between the various merchant account providers before making their selection. But be sure to compare apples to apples and take equipment rental or purchase prices into consideration. For example some merchant account providers, such as North American Bancard, offer businesses free equipment, service and support, in addition to guaranteeing the lowest processing rates.

Processing Payments with a Merchant Account

The proliferation of online services and payment options has changed the merchant processing landscape in recent years, allowing merchants and businesses to accept credit and debit card payments online. Some merchant account providers offer online payment processing, but you find it better to go through a dedicated e-commerce site that specializes in these services.

Even with the increase in online shopping, the vast majority of payments are still accepted via a credit card terminal, similar to those you would see in a store like Wal-Mart, or your local grocery store. Credit card terminals permit clerks to slide the credit and debit cards through the terminal to read and process the transaction. Some of the more advanced credit card terminals can process gift cards, allow cashiers to manually enter credit card numbers or expiration dates, and even verify and process checks. The information is then securely transferred to the merchant bank or third party vendor via a secure phone or Internet connection.

In addition to processing credit and debit cards more quickly, credit card terminals offer less expensive rates for processing transactions and are safer for customers and businesses alike, because they reduce the need to keep credit card numbers on site and diminish the threat of credit card number theft and identity theft.

Who Needs a Merchant Account?

Almost any business could benefit from utilizing a merchant account. Whether your company is a fortune 500 company or a two person family based business, if you process credit cards or debit cards, or would benefits from accepting these forms of payments, then you can benefit from using a merchant account. Since many people no longer carry much cash, accepting credit and debit cards can be more convenient, safer, and quicker than having someone write a check, and it’s certainly better than missing out on a sale!

Categories
banking

Simplify You Banking and Financial Needs

If you are a small business owner, chances are you are very busy trying to run a company or companies, balance your family and personal life, and have some time for leisure and relaxation. In order to be able to accomplish all of this without getting overworked and overwhelmed, you must be smart with you approach you finances.

Use Bill Pay: If you are not using online banking tools like bill pay, you are missing a primary opportunity to save time and money. Two basic types of bill pay are available. First, you can pay bills through your business checking or savings account through your bank, or you can pay through your utilities and services providers (i.e. mortgage company, heating, power, & light company).

Usually, these services can be automated, so you do not need to worry about missing your bill payments. This will save you time and will potentially save you money because you do not have to mail in payments. Another advantage of using bill pay is that it cuts late fees because your payments are always on time.

Caution: When using bill pay, make sure that it is working properly during the first couple of months. Also, make sure that your service providers or bank are billing you correctly and are not charging you fees for the billing service.

Consolidate Banking Accounts: Simplify your life by consolidating your bank accounts. Instead of trying to juggle multiple accounts, research and find out which bank or credit union can best meet your needs for your business, investments, and personal banking. This will allow you to take more control of your finances and avoid unnecessary time and money spent that is associated with trying to run accounts with multiple bank.

It is very important that you make an informed decision when selecting a bank for your various needs. Understand the rewards and fees associated with different financial accounts, as there can be a lot of variance in services and charges offered.

Use Remote Deposit: Remote deposit is a service offered by most banks and credit unions for businesses. Once you sign up with the financial institution, you receive a scanner, which allows you to scan customer checks and deposit them into you banking account. This can be done from the convenience of you office or home.

The advantage of this is that you save time, money, and gain convenience, since you can deposit check from your offices or home. Also, since this is all done online, your company will have access to all records online. This will help as you run reports to and answer customer service inquiries about payments. Some financial institutions have developed apps for smartphones like the iphone, which enable you to scan and deposit checks anywhere by simply taking a picture of the check and processing it through smartphone app.

Think Smart by Using the Free Tools Available.

As you look to simplify your schedule and banking related duties, take advantage of the many free tools that are available. The list above is just a sample of numerous opportunities, and it is up to you to explore them, and take action.

Categories
banking

How to Create a Business Cash Flow Statement

Cash flow statements are extremely useful for a business to get a complete picture of all money coming into the business and all money going out of your business during a specific period of time.  When organizing your small business finances, you should create a cash flow statement annually at a minimum, but businesses of all sizes benefit from creating cash flow statements on a monthly or quarterly basis.

A common misunderstanding of cash flow statements is that it will show the same number as the “net income” from the Profit and Loss Statement.  This is not the case, because your net income on the P&L will show non-cash information, like depreciation and physical assets, and because net income is calculated from net sales – not actual cash payments.

How to Create a Business Cash Flow Statement

What Cash Flow Statements Are Used For

Business owners can rely on cash flow statements as the guideline for creating their budget.  It will show you where your income has been generated and where the money went.

If applying for a business loan, a lender will ask for a cash flow statement to analyze your ability to repay the loan.

If your business is publicly traded, you are required to create cash flow statements and follow the Generally Accepted Accounting Principles (GAAP).

How to Create Your Cash Flow Statement

There are three sections in a cash flow statement which can show the net change of cash coming in and out of your business during a specific period of time:

  • Operating Activities
  • Investing Activities
  • Financing Activities

Find your beginning cash balance – how much money do you have in the bank and in hand at the start of the month or period you’re creating a cash flow statement for?  For example, if your business has $1400 in the bank and $600 in petty cash, you’re starting cash balance is $2,000.

How much money came into the business –  include all income to the business from sales and  other business activities; including payment for old debts.  If you brought in $5,000 in sales and $350 from old debts people owed to you, your total cash in for the period is $5,350.

How much money went out of your business – include all expenses and purchases.  You’ll probably have salaries, rent, utilities, supplies, loans, taxes, etc.  If you spent $3000 in salaries, $500 for rent, and $220 for office supplies your total cash out would be $3720.

Calculate the cash flow – subtract the total amount of your cash out from your total amount of cash into the business for the period you are analyzing.  In our example, you would subtract $3,720 from $5,350 for a net change of $1,630.  If you have a negative number from this calculation, your business is operating at a negative cash flow and is in trouble.

Find your ending cash balance – add the net change you just found when calculating the cash flow to the beginning cash balance to get your ending cash balance.  In this example, it would be $3,630.  This becomes your beginning cash balance for the next period.