If 100% of your business sales is dependent upon online transactions—and it is if you’re a network marketer doing business globally — then making online payments in a secure environment and credit card fraud protection should be a top priority.
Let’s face it; we hardly ever use cash anymore. E-commerce is growing and the online shopping trends are increasingly mobile. Our swipe and spend economy has definitely created more business and marketing opportunities, more transparency and, unfortunately, more fraud. As a business owner, pay close attention to the activities in the back office.
Even though the addition of 50 new distributors in 90 minutes to your downline seems like a reason to celebrate, it’s actually a warning signal and it actually happened recently in the Philippines. A U.S. distributor got excited because of all the merchandise he moved in one and a half hours. What he failed to realize is, it was a fraud ring driving the sale.
He not only lost the merchandise and the revenue, it brought his business and his brand front and center to the attention of card association fraud investigators.
Regardless of your cultural background, your most valuable asset is your good name. Assumptions and misinformation about your credit standing and what improves or has a negative impact on it are frightening and are seldom examined.
As an example, the policy of having one credit card shared by multi family and friends can do major damage to your business and your name. A new distributor in South America used his credit card number to sign up multiple friends and family to his down line and received cash for products in repayment. When the bill came, the cash was gone and this distributor found himself deep in debt and legal trouble.
Your name and your credit history are synonymous with banks worldwide. Here are a few tips to keep them both in top shape.
Keep balances low – This accounts for 10% percent of your credit score. If you pay your balance in full each month and/or keep your balances low, it shows that you are financially responsible.
Use caution co-signing – Be careful if you co-sign for someone else because it will report on your score. Also, if the original applicant defaults you are financially responsible.
Avoid cash advances – Never take a cash advance against a credit card. It has daily interest charges, and the APR is much higher on the amount you withdraw.
Use Mobile Security – Because most of us do business on our phones, it’s a good idea to only use secure mobile payment options.
Bottom Line: Improve your credit standing and you improve your profits.
Now is the time to pay close attention to your credit statements and credit budget. Together it dictates how much you pay for insurance, cars, houses, business loans and the annual percentage rate on our credit cards. It often determines the price you pay, the interest rate you get and, in some cases, whether or not you get hired. More importantly, monitoring your credit activity can alert you instantly if someone is trying to steal your identity.
Whether you run a business or a household or both, you know how much money is coming in and how much money is going out. You measure your success by the numbers. You need to use this same management strategy to monitor your credit statements and spending habits. If anything is amiss, take immediate action to protect your name. You need to dispute any information that is incorrect and you need to follow up and make sure it is corrected.
Success is a two-card system: Debit and Credit
Because the use of credit and debit cards affects almost every aspect of our lives, our businesses, and our buying power, its important to understand the difference between these two cards and be deliberate about which card you use and why. Make it a conscious choice.
A debit card is a smart strategy for budgeting because it draws from money you already have in your checking account. It typically has no fees or finance charges and no negative impact on your credit score. Debit cards rarely drive up debt unless you spend more money than you have and get charged overdraft fees. Overdraft fees do not negatively affect your credit score unless you get sent to collections for non-payment of these fees, but the amount you pay for them can be a sizeable sum.
Debit cards are best used for everyday expenses with the exception of any online purchase. Within minutes, someone can have access to your savings or checking account balance and it can take up to eight weeks to resolve the issue.
Credit cards are a smarter and safer bet for traveling and larger expenses. And safer is the operative word here. Debit and credit cards are not treated equally by consumer protection laws in the U.S. Under federal law, personal liability for fraudulent charges on a credit card cannot exceed $50. With a debit card, personal liability could be 10 times that amount depending on how quickly the fraud is reported.
One last tip : Rewards, frequent flyer miles and other perks are often touted as a reason to use or get a credit card. The truth is less than 30 percent of people actually use their rewards programs and I suspect even fewer have read the fine print regarding the restriction and timelines for reward usage. Best Advice is to monitor your credit activity. Pay off your credit card balance every month. There is no free lunch. If you’re making a purchase that is going to require instalment payments it is best to calculate what the total cost of that purchase really is – including interest rate and processing fees.
In other words, think before you swipe.
Buy Polly Bauer’s book The Plastic Effect on Amazon by clicking on the image.
Polly Bauer is a preeminent expert on credit cards and all forms of payment. She is the author of The Plastic Effect and Credit Intelligence and speaks regularly on the wise use of credit in the network marketing industry.
Ms. Bauer currently serves as CEO of Polly Bauer & Associates, Founding Chairman and Board Member for Direct Response Forum, and as a Board Advisor to the CNP-Europe, and as Payments Advisor and Director to multiple tech and Direct Sales organizations.