During these times when credit is becoming harder and harder to get, business credit cards have taken the place of small business loans for many companies.  While providing many benefits, business credit cards are just like their consumer counterparts - they can lead to trouble when used unwittingly.

These are the things you need to watch out for:

Late Fees. According to a research from American Express, late fees from the business credit card sector reach an average of $2.9 billion a year.  While your own charges may seem like a speck in the face of that, realize that it’s money left on the table - not a good idea at all.

Watch Out For Introductory Offers. Everyone loves zero percent introductory rates.  Problem is, they’re too good we end up forgetting them as we plan our business expenses.  If you’ve been counting on the zero interest to beef up your bottom line, make sure the sudden surge from 0% to 10%+ doesn’t hurt you.

Avoid Personal Spending On Business Accounts. As with many things in life, mixing business and personal spending is a recipe for disaster - one that you’d much rather not deal with.  Keep accounts separate, with no concessions.  Even at the most tempting instances, avoid it with all your might.

Set Your Own Ceiling. Just like consumer credit cards, you’ll have to watch for how much balance you run up on your business accounts.  Spend too much and you can be looking at a business disaster - one that leaves your source of income in really bad shape.

If you avoid dealing with banks for some reason and prefer to spend in cash, a prepaid card can make your life just a tad more convenient.  With a reloadable prepaid card, you can easily use cash to make purchases that would normally require a credit card, including shopping online and booking a hotel room in advance.

Great For Students

Prepaid cards are great financial instruments for students, evidenced by the overwhelming number of high school kids using them.  With one in tow, parents can easily reload their children’s accounts in cases of emergency, without having to disrupt the rest of their day while doing it.

Money Management

Apart from the purchasing convenience it allows, prepaid cards are a great way to manage your money compared to cash.  Most prepaid cards offer online account statements, which allow you to track your spending without having to keep your own record.  They also allow you automate bills the same way you can with a credit card - a great alternative to having to mail out your payments every month.

Fees

The biggest deterrent to prepaid card are the fees.  While credit cards allow the issuers to make money from the interest on the debt, prepaid credit cards  earn their keep from charges.  Make sure to find out what transactions you will be charged for when you use a prepaid card solution so you can plan their use accordingly.   Among the likely fees most prepaid cards charge include reloading fees, maintenance fees and withdrawal fees.  Good news is, some cards charge less fees than others so shop around before signing up for one.

You’re either going with the flow or allowing yourself to be left behind - that’s really the gist of what’s happening right now in the world of technology.  The world of credit cards is no exception, with more and more people looking for more mobile ways of doing business.

A new iPhone app called iSwipe allows merchants to accept credit card payments with their mobile device, making it possible to process orders with nothing but your iPhone in tow.  The end result is nothing short of convenient.

When you’re out on a trade show, for instance, you can accept orders right on the show floor, without needing any extra equipment.  If you’re selling products door-to-door, you can similarly process payments right there and then.  No need to make a call to the office or wait until later in the day before you can process orders - all of it can happen right as the buyer decides.

You don’t need to think long and hard before figuring our how much this can benefit your business, especially if you’re a freelancer or a similarly small operation.  If you’re a consultant who relies on check payments from your clients, for example, you can now include credit card payment as an on-the-spot option.  If you run a party plan business like Tupperware - same thing.

The iSwipe employs the services of three common payment gateways to facilitate payment processing via the iPhone, namely Paypal, Authorize.net and CyberSource.  You can download it from the App Store to give it a try.

Who should you blame when you discover that your credit card information got stolen?  If you can’t figure out how it could have possibly been compromised, think back to the last few months: did you sell any of your old computers, game consoles and gadgets?

According to many dealers who buy pre-owned electronics such as laptops, computers, game consoles (like Xbox 360 and PS3), cell phones and PDAs, many consumers dispose of their wares without bothering to reformat the storage.  As such, many of the pertinent info they save into the gadgets remain there, easily available for the taking.

Both on laptops and gaming consoles, customers frequently enter their credit card numbers to purchase from online services.  To avoid having to enter it every time they need to buy something, most people choose to save that info on their computers so that their transactions are automatically completed without having to go through the same grind again.   On cell phones and other similar portable gadgets, many people actually save information like credit card numbers and PIN so they can refer to it quickly when they need to.

When you go in to sell any of these stuff, you’ll need to make sure none of your data remains, lest be at risk of your financial information falling into the wrong hands.  As such, always follow these guidelines:

• Use a data shredding program to overwrite information on your computer’s hard disk.  While reformatting may be able to do the job, certain data recovery tools are actually able to retrovert information even after formatting.
• Make sure you reset your game console to factory settings before selling them.  This should restore all contents of the storage to its original form.  To make sure, try to buy something and see if the data is still present.
• Like game devices, reset your phone and other portable consoles to factory settings.  Always verify if the  process worked before bringing it into the shop.

If you have a cash-back card but can’t squeeze the most value out of it because most of your purchases are either in non-major categories or you can’t meet the cutoffs, Bank of America’s, American Express-branded Accelerated Cash Rewards Card just might prove a good alternative.  There aren’t much perks to it, just standard cash returns on a regular schedule, but that might be all you’re looking for.

Instead of having to shop in set categories to maximize your cash back, this card gives you a flat rate for all purchases.  There is no minimum spending to reach a certain quota nor are there are no caps to how much rebates you can earn.  In fact, it’s a great card for those who don’t want to be hop through obstacles in order to maximize their credit card’s value.  Every time you use it, you get the most that you can from it.

Rebates are given out at a flat 1.25% across all categories.  There are no limits to how little or how much you can earn.  You can get your cash back in the form of a check, direct into your credit card statement or deposited into your Bank Of America account.  APR is average for these types of cards, offering between 8.99% to 18.99%.  There’s no annual fee as well.

If there are certain consumer categories that take the bulk of your spending and you find cards that offer better rates than 1.25% for them (without all the hoop-chasing), they will probably be better options.  If you think specialty cash back cards like those doesn’t benefit you as much, the Bank Of America Accelerated Cash Rewards Amex Card will probably suit you better.

Now that more and more people are losing their jobs and livelihoods, having a plan for such instances is extremely important.  While it’s more or less certain that nobody is looking forward to being booted out of work, it does pay to be ready in case the unwanted event does occur.

1. Avoid dipping into your savings.

If you do lose your job, your savings will be your one and only safety net.  No matter what happens, avoid dipping into it to handle your monthly credit card bills.   In uncertain economic climates like today, your savings is yours - don’t let your credit card company anywhere near that money.

2. If you’re afraid you might lose your job, don’t inform your creditors yet.  Instead, spend your time looking for a new income source.

Before you get in touch with your credit card issuer about a potential problem, be sure it is for certain.  You don’t want to raise a red flag before you need to.  Focus your energies on finding a new job or an alternative source of income.

3. Ask to defer payments.

In the event that you do lose your job, call your credit card company and ask if it will be possible to defer payments without penalty even for a month or two.  It’s not common knowledge but many credit card companies do have a hardship program, which should allow you time to recover, without causing too much damage your credit score.  Instead of closing your account and restructuring your debt the way most payment assistance programs do, hardship programs just gives you a small leeway until you can get back on your feet.

4.  Ask for a payment restructuring

In case you end up in between jobs for an extended length of time, you will likely need to arrange for a payment restructuring.  What will happen is your account will be closed and your debt converted into a lower-interest loan, with fixed monthly payments.  It will hurt your credit score but should prove better than defaulting on your debt entirely.

We’ve talked a lot about the advantages of cleaning out your balance monthly as opposed to keeping a balance on your credit card.  While generally a good rule to follow, not all situations will warrant the same solution.  In fact, there are some times when keeping a balance makes more sense than being debt-free month-to-month.

1. If you have a financial plan and the balance is a necessary part of it

If you have a current financial plan which can make better use of your cash than putting it into paying off debt, then do it.  Using the flexibility of a credit card to let you float money while you look towards the future is not only viable, it’s smart.  Of course, the plan has to be sensible in order for this setup to hold any water.

2. Your business needs it to survive

Bank loans and small business financing is getting harder to procure nowadays.  Should your business be a profitable source of income, using your credit card balance to fund operations may be acceptable.  So long as you can still profit in spite of the interest then credit card use should be to your advantage.

3. You’re short on cash but expect money in the future

During times you’re in between jobs, for instance, using your credit card instead of dipping into your cash savings can prove a better insulation to potential financial exigencies.  Conserving cash is preferable to cleaning out your balance when the choice comes down to those two, especially during trying financial times.  Here’s the deal, though: you must absolutely do this only when you’re certain you can cover any debt you run within the short term (three months or less).  Any more than that and you’ll be putting your financial well-being at serious risk.

4. Real emergencies occur

If you find yourself in a real emergency, such as when a tornado blows the roof off your house or your son ends up in a hospital, carrying a balance is undoubtedly preferable to having to suffer through the situation.  Needless to say, this rule is strictly for actual emergencies, not frivolous ones such as not having a new dress for a party.

A word of warning to Citibank credit card holders: your no-tax internet shopping days may be over.  If recent reports are correct, Citibank is now charging foreign transaction fees to customers who use their cards over the web to order from international companies.

If you’re in the US and order shirts from a Hong Kong supplier, for instance, you’ll get slapped an automatic 3% foreign transaction fee, even when you’re billed in dollars.  Do you host your websites with a UK-based hosting company?  Your monthly hosting bills will now come with an additional 3% tacked on to it.  If you’re a Citi card holder, better check the address of the merchant you’re buying from before making any purchases online.  Otherwise, you could suffer through considerable charges.

Since many people shop online almost as much as they do in physical stores, that means a whole lot of credit card holders will end up affected by this change.  Can you imagine how much money the credit card issuer stands to make on this?

While I totally understand Citibank trying to recover their losses during these trying times, this is really a bad way of going about it.  I, for one, use my Citi card for a lot of recurring business-related international bills and have already begun using a different payment method.  Will Citibank make more money if I actually stop using their card, as well as thousands of other people who don’t appreciate a three percent tax?  I doubt they will.

Responsible use, ultimately, is what separates those who benefit from credit cards and those who fall victim to its failings.  Credit cards, after all, are just an available tool.  Whether it serves you or hurts you depends on how you exercise its capabilities.

There are two types of credit card users.  The first one are the diligent types, who pay off their monthly debts in full and refuse to carry a balance.  If you’re one of these, congratulations.  This type of habit allows you to use your credit cards, reap some great benefits (points, cash back, convenience, etc) and remain relatively debt-free.

The second type of user is the type who carries a balance.  Whether they have their cards maxed out or just have half of it continuously used up, they’re the people from whom credit cards earn their multi-million business from.  They’re the ones affected by steep interest rates, late charges and a whole host of other fees.  Ironically, they’re also usually the ones who derive the most benefit from their cards, able to stretch credit to serve them for longer periods.  If they’re using the expenses to invest in a business or anything else that potentially appreciates in value, they could be end up ahead in the end.

Here’s where things really get tricky.  While the first type of credit card user doesn’t really get the most value out of their card, they’re also never in danger of over-stretching their financial capacity.  As such, they rarely get in trouble when emergencies and problems throw their budgets out of balance.

The second type, however, are the ones who end up in a credit mess.  When you have a large revolving balance and exigencies happen, you’ll always end up defaulting on one or two payments that can really cost you big.  Even worse, large-enough financial difficulties can leave you unable to settle your debts.

Ideally, all credit card users should be like the first type.  Sure, credit card companies won’t be making as much.  Yet, it’s still the best thing overall for our economy.   Can you imagine losing your job in this current financial climate with a revolving balance in tow?  I really hope we’re all learning something from the current state of finances the world is in.

Most of the time, rewards credit cards feature higher APR and more expensive maintenance fees, all of which should be easily offset if you’re able to make use of the points you earn to grab those rewards.  That is, if you actually make use of them, unlike an overwhelming majority of credit card holders.

Even though cashing in those rewards cost nothing, many people simply seem to not care enough, ignoring their points till the last minute and even letting them expire.  You do know they expire, don’t you?  If you don’t know the constraints on your points, check the terms of your credit card agreement to verify.

Keeping It Alive

If your points are near expiry and you can’t find anything in the rewards network you’d like to exchange it for, call up customer support and inquire about possible ways to keep the points alive.  While some will require you to either use up the points before the end date or lose it forever, some credit card companies will offer a bit more options.

Many companies allow your points earnings to stay past due date if you make certain types of purchases.  Find out the cheapest thing you can get to keep those points alive and get it.  I’ve heard of some rewards network that allow a single 99 cent iTune download to let you keep those earnings active.

If there’s really no choice but to use them up, try requesting if the points can be converted into payment for some of your charges and fees.  That’s at least better than being forced to get another ugly toaster.