One of the most popular ways for people to pay you when you own a small business is with a check. It's certainly worth your while to accept checks, since they have lower fees than credit cards and can't be charged back.
But there are potential dangers to accepting checks, including the possibility of fraud or someone writing a bad check. Bad checks, in turn, can come about because there aren't enough funds in an account, because the account has been closed or because the individual has put a stop payment order on the check.
While dealing with bad checks can be a pain, there are technological advancements that can make it easier for you to weed out the bad checks before they happen.
The easiest thing you can do that might prevent some bad checks is to accept debit cards. Debit cards look like credit cards, but they pull directly from the person's account. If they don't have enough money to cover the payment, you'll know it because the payment won't go through.
Accepting debit cards is also a great option because there's very little danger of a debit card transaction being fraudulent since the person using the card has to know the PIN number for the bank account.
Offering the option of paying with debit cards won't take care of all your bad check writers, however.
Another option is hooking up with a payment processing provider who can guarantee your company protection from bounced checks. A check guarantee program allows you to accept checks from anywhere in the United States and Canada with confidence.
This system lowers you risk of having to pay fees or lose money because of bounced checks or insufficient funds in an account. You can sign up for a program like this and forget your worries about bad checks almost overnight.
Seeing people buying food or shopping clothes using credit cards has been commonplace these days. The phrase "Charge it!" has become a favorite expression of card users, and has been commonly heard in shops, dining places, and elsewhere.
After all, who does not want to use these credit cards? Easy to use, these sleekly-designed cards can be used to buy practically everything in commercial establishments regardless of how much (or less) money does one carry money in his wallet. Short of cash and hungry? No grocery supplies? Going to a party but no money to buy that dress you've been drooling for? No problem! Your good ol' credit can care of that for you. No worries.
Credit Cards: Not Free Money
But wait. A credit card spree may be fun, but that doesn't free you from responsibilities in paying the expenses you incurred from using your credit card. Credit cards, after all, are interest loans in disguise. Typical credit cards ask for a number of charges, including:
" A finance charge, which is an interest charge for the unpaid portion of your monthly bill;
" An annual membership fee;
" Or if you're paying after the deadline, there is also a late payment fee which could have a higher interest rate.
In fact, many credit-card holders face credit-related problems. Poor purchasing decisions, lack of information on credit card fees, and disregard for upcoming credit payments are among the reasons why many credit-card users are often hard-pressed in paying their debts. Some are not even able to pay for the actual purchases they made, just barely managing to pay credit card company charges.
Before you get drowned in a sea of debt, here are some tips to help you manage your credit-related expenses:
" Be credit smart. Applying for a credit card application means you are ready to assume the responsibility for paying your credit. You and only you - not your parents, spouse, or whoever - is responsible for that.
" Use your credit cards wisely and sparingly. Remember: Paying goods and services using credit cards are more expensive than using cash or checks. Credit payments include interest and other fees. Use credit cards as sparingly as possible. If you really need to use credit cards, carry only the cards that you will actually use.
" Use credit only if you are sure you can repay it. Paying your debt on a credit card using another does not count.
" Avoid impulse shopping on your credit card.
" Use credit for money emergency only.
" Seek credit counseling as soon you see financial problems on the horizon.
