With more than 600,000 new small businesses started each year, it’s safe to say that the dream of being a successful business owner is a strong one. If you are considering starting your own business, or are already the proud owner of a business- here are 7 reasons why your small business needs a credit card: With more than 600,000 new small businesses started each year, it’s safe to say that the dream of being a successful business owner is a strong one. If you are considering starting your own business, or are already the proud owner of a business- here are 7 reasons why your small business needs a credit card:

1. Keep your personal finances and business finances separate. It’s easier than you think to accidentally mix up your funds. Using a credit card that is used only for your business expenses and purchases eliminates the problem of labeling every transaction in your personal checkbook or on your personal credit card statements at the end of the month.

2. Build credit in the name of your business. If you obtain a credit card in your business name, the more you use it and make on-time payments, the stronger you will build the credit score of your business. After several months of building a good credit history, you may be able to obtain small business loans or other sources of financing if necessary.

3. Get stuff for free. There are numerous rewards programs with credit cards. If you choose one that works for your business, you can easily earn the things you usually buy for free. For example, some rewards credit cards offer you a way to earn office supplies at a discount. The key to making a rewards program successful is to choose one with no annual fee and pay your balance off in full each month. If you travel regularly for business, it would make sense that you get a card with travel rewards- either earn miles towards free flights, or get free or discounted hotel rooms.

4. Easy record keeping. Owning a small business means you are allowed to deduct certain purchases on your taxes, but only if you have good records to prove you’ve made those payments. A credit card with an annual, itemized statement will make tax season a snap, regardless of the number of transactions you’ve made on your card.

5. Additional credit cards for employees. As your business grows, you may find the need to allow key employees within the organization the ability to make purchases or pay for business expenses on your behalf. Most credit card companies will allow you to obtain additional cards in other people’s names. Your transaction listings and statements will show which credit card made each purchase, allowing you to see at a glance whether the employee use of credit is being abused or not.

6. Concierge services. Depending on the credit card you choose, you may benefit from additional services like reservation assistance, verification of flights, and even a personal shopping service. Did you forget to get your wife flowers for your anniversary? A quick call to your credit card concierge service and they can make the arrangements for you.

7. Travel benefits. In addition to the potential to save money on travel costs with a credit card rewards program, most credit cards offer travel accident insurance that helps cover you for things like lost luggage or flight cancellations.

This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online. Read more…

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Those who have followed the recent credit card foreign transaction fee lawsuit and subsequent settlement are aware of the hidden costs of making a purchase in foreign currency. In the most common case, both the network (ie., Visa, MasterCard, Amex) and the card issuer will tack on a surcharge, usually totalling 1-3%, to every […]

Those who have followed the recent credit card foreign transaction fee lawsuit and subsequent settlement are aware of the hidden costs of making a purchase in foreign currency. In the most common case, both the network (ie., Visa, MasterCard, Amex) and the card issuer will tack on a surcharge, usually totalling 1-3%, to every overseas transaction. (For a full table of these fees by issuer, see the FlyerTalk Wiki.)

Amex vs. Visa / Mastercard
I recently decided to perform a mini experiment to explore a little publicized aspect of making purchases in foreign currency–namely, to discover the difference, if any, between the underlying exchange rate used by American Express and that of Visa/Mastercard.

The experiment
In the past, I had heard that Amex used inferior exchange rates, so to test that theory I set up an admittedly imperfect experiment, pitting my Starwood American Express against my Chase Visa.

Last week, I ran a series of charges against each card. On Jan. 28, I charged 25 British pounds on each card, with each charge coming within minutes of one another. I repeated this again on Jan. 30 and Feb. 1. In theory, the Starwood Amex with its 2% forex fee should beat the Chase Visa with its overall 3% forex fee (1% from Visa + 2% from Chase), assuming that their underlying exchange rates were comparable.

The results
Unfortunately this test didn’t yield the information that I was hoping for. For one thing, I found that while Amex processed each transaction on the day that it occurred, Visa took until the next day, meaning that I couldn’t directly compare the exchange rates.

When I tried to calculate the foreign exchange fee using the average daily Interbank rate, as quoted by Oanda.com, I got the following results:

Further Research
Since these results weren’t exactly what I was expecting, I did a bit more research and found some information that helps explain why I didn’t get nice, round numbers. American Express describes how it determines its conversion rate in the fine print of your billing statement:

If you incur a Charge in a foreign currency, it will be converted into US dollars on the date it is processed by us or our agents. Unless a particular rate is required by applicable law, we will choose a conversion rate that is acceptable to us for that date. Currently, the conversion rate we use for a Charge in a foreign currency is no greater than (a) the highest official conversion rate published by a government agency, or (b) the highest interbank conversion rate identified by us from customary banking sources, on the conversion date or the prior business day, in each instance is increased by 2%. This conversion rate may differ from rates in effect on the date of your charge.

Visa also explains how it handles foreign currency transactions:

Will the rates shown be the rates charged to my account?

The exact rate you receive depends on when the transaction is posted to the Visa system. The day the charge actually posts may be later than the day on which you made the purchase, depending on how promptly each merchant handles their Visa transactions.

How does Visa calculate its rate?

Every day—except weekends, Memorial Day, Christmas Day and New Year’s Day—Visa calculates the rate for the next day’s transactions. The Visa rate is selected from a range of rates available in wholesale currency markets or the government-mandated rate in effect one day prior to the applicable central processing date. Visa makes this rate available to issuing banks, which may adjust the rate when billing cardholders by applying a foreign transaction fee. The rate Visa makes available to issuing banks may vary from the rate Visa itself receives. Most consumers find that using Visa is a convenient and cost-effective way to make purchases and obtain cash when traveling internationally.

How accurate are the rates?

The rates you are shown are generated with Visa’s internal database for exchange rates and are accurate to two decimal places. However, they are only meant to serve as an indication of the rate you could expect to receive from your issuing bank. As exchange rates change constantly, the rate is only accurate for one day. The exact rate you are charged depends on when the transaction is posted to the Visa system, which may be later than the day on which you paid, depending on how promptly each merchant handles their Visa transactions. Additionally, your final transaction amount may differ depending on whether the merchant converts the currency at the point of sale or if the bank that issues your card assesses a foreign transaction fee.

My conclusion?
Based on this information, I learned that a direct comparison of exchange rates will always be difficult given how much latitude the networks have afforded themselves in determining the conversion rate, especially with regards to the timing of the transaction. From a practical standpoint, it’s more important to look at the other components of foreign currency fees rather than the underlying exchange rate.

Instead, focus on the fees that are documented and well-defined. See the table below for a summary of these fees for major issuers:

This post is from Credit Card Watcher’s Credit Card Blog.

An Experiment Gone Awry: Comparing Amex Foreign Exchange Fees to Visa and Mastercard

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From Credit Card Watcher - www.creditcardwatcher.com