Sam’s Club VS Costco Credit Card: Which Is Best For Your Business?

Sam’s Club and Costco are the two biggest wholesale clubs (also known as warehouse clubs) in America, and it so happens that each one offers a consumer credit card.

The Sam’s Club Mastercard and the Costco Anywhere Visa Card by Citi have a lot in common. The two cards have similar APRs, a similar annual fee structure (both cards technically lack an annual fee, but you must be a member of the wholesale club to get the card, and each wholesale club has an annual fee), and similar cash back rewards. However, as you’ll see, there are a few key differences.

Let’s see who comes out on top in a battle between Sam’s Club and Costco for wholesaler credit card supremacy.

Sam’s Club Mastercard Citi Costco Anywhere Visa

Sam’s Club Mastercard

Citi Costco Anywhere Visa

$0 but Sam’s Club membership is required and starts at $45/year

Annual Fee

$0 but Costco membership is required and starts at $60/year

17.15% – 25.15%, Variable

Purchase APR

17.49%, Variable

Get $45 as a statement credit when you make a $45+ purchase the same day you get your card

Bonus Offer

None

N/A

Purchase Intro APR

N/A

N/A

Balance Transfer Intro APR

N/A

0%

Foreign Transaction Fee

0%

  • 5% cash back on first $6,000/year spent on gas, 1% thereafter
  • 3% on dining/travel
  • 1% on everything else
  • Max cash back per year is capped at $5,000
Rewards
  • 4% cash back on first $7,000/year spent on gas, 1% thereafter
  • 3% on dining/travel
  • 2% on Costco/Costco.com
  • 1% on everything else
  • No cap on cash back/year

Compare

Compare

Eligibility Requirements

The Sam’s Club Mastercard requires good to excellent credit (a credit score of 690+) while the Citi Costco Anywhere Visa requires excellent credit (a credit score of 720+).

Fees & Interest Rates

Sadly, neither card features an introductory 0% APR period, so be aware that you’ll be on the hook for interest charges immediately if you start carrying a balance from month to month.

As for the purchase APR, the Sam’s Club Mastercard offers a variable APR of either 17.15% or 25.15%, depending on your credit. By contrast, the Costco Anywhere Visa sports a variable APR of 17.49% for all cardholders. With great credit, you can qualify for a lower APR with the Sam’s Club card, but on the other hand, Costco won’t try to hit you with a 20+% APR no matter what your credit.

Technically, neither card has an annual fee. However, you have to be a member of each wholesale club in order to get either card, and each club has an annual fee. Sam’s Club memberships cost $45 (baseline membership) or $100 (premium membership) while Costco membership costs $60 (baseline) or $120 (premium). Sam’s Club has a slight edge here.

Neither card has a foreign transaction fee.

Bonus Offer

The Sam’s Club Mastercard currently has a modest bonus offer: $45 as a statement credit when you make a $45+ purchase on the same day you receive your card (offer ends June 15, 2019).

The Costco Anywhere Visa has no bonus offer.

Winner: Sam’s Club!

Earning & Redeeming Rewards

Sam’s Club and Costco have remarkably similar cash back programs. The Sam’s Club Mastercard offers the following rewards:

  • 5% cash back on your first $6,000 in gas purchases per year (1% cash back thereafter)
  • 3% cash back on dining and travel purchases
  • 1% cash back on everything else
  • You can earn a maximum of $5,000 cash back per year
  • Cash back can be redeemed only once a year in the form of a check that can only be cashed at a Sam’s Club outlet

As for the Citi Costco Anywhere card:

  • 4% cash back on gas at eligible gas stations worldwide (including Costco), max $7,000 per year
  • 3% cash back on restaurants and eligible travel purchases
  • 2% cash back on purchases from Costco and Costco.com
  • 1% cash back on all other purchases
  • No cap on the amount of cash back you can earn per year
  • Rewards are redeemable only once a year as a check that can only be cashed at a Costco

First, the similarities: Both cards offer 3% cash back on dining and travel purchases, both cards offer 1% cash back on all non-bonus categories, and both cards have the same inconvenient and cumbersome redemption system in which you can only redeem your cash back once per year and only inside a physical Sam’s Club/Costco store. Let’s now look at the three main differences.

The first difference: The Sam’s Club card offers 5% cash back on gas while the Costco card only offers 4% on gas. This is somewhat mitigated by the fact that your first $7K in gas spending per year gets you the high cash back rate with the Costco card, whereas with the Sam’s Club Mastercard, the first $6K in annual gas spending gets you 5% cash back. Doing the math reveals that you can earn a maximum of $300 in cash back on gas with the Sam’s Club card before your gas cash back rate reverts to 1%. With the Costco card, that number is $280 — just a $20 difference. Slight edge to Sam’s Club here.

The second difference: Costco’s Anywhere Visa gives you an elevated 2% earning rate (not great, but better than 1%) on spending at Costco and costco.com. By contrast, the Sam’s Club card does not reward your Sam’s Club spending with extra cash back. Your Sam’s Club purchases (in-store and online) will earn you just 1% cash back, the standard rate. The Citi Costco card wins this point.

The final difference, and the most significant one for the consumer or entrepreneur who spends a lot on the bonus categories in question here, is that Costco does not cap the amount of cash back you can earn per year. The Sam’s Club Mastercard does cap your annual cash back rewards — at $5,000 per year. As the Costco card wins this point, the Costco card wins this category by a hair, but if your card spending goes mainly towards gas, the Sam’s Club Mastercard might be better for you.

Benefits & Other Perks

Let’s look at what you’ll get in terms of extraneous benefits from the two cards in question. The Sam’s Club Mastercard will get you:

  • Identity theft resolution services
  • Price protection
  • Extended warranty

The Citi Costco Anywhere Visa comes with more benefits:

  • Travel & emergency assistance
  • Zero-liability fraud protection
  • Citi price rewind
  • Purchase protection
  • Extended warranty
  • Worldwide travel accident insurance
  • Trip cancellation & interruption protection
  • Worldwide car rental insurance

The Citi Costco card clearly has the edge here.

Which Is Best For Your Business?

Choose Sam’s Club Mastercard If…

  • Sam’s Club is your favorite (or most conveniently located) wholesale club
  • You plan to use your card predominantly on gas purchases
  • You’re looking for a bonus offer from your card
  • Your credit score is between 690 and 720

Sam’s Club Mastercard


Sam's Club Mastercard

Compare

Annual Fee:


$0

 

Purchase APR:


17.15% – 25.15%, Variable

Choose Citi Costco Anywhere Visa If…

  • Costco is your favorite (or most conveniently located) wholesale club
  • You spend a lot on the bonus categories and don’t want your annual cash back capped
  • You want your card to earn you extra cash back when you shop at your wholesaler

Final Thoughts

The Sam’s Club Mastercard and the Costco Anywhere Visa Card by Citi are so similar that if you’re deciding between these two cards, it’s probably going to come down to whether you prefer Sam’s Club or Costco. All else being equal, however, I’m inclined to give the Citi Costco card a narrow victory. That’s because the Costco Anywhere Visa a) doesn’t cap your annual cash back and b) offers 2% cash back when shopping at Costco (in-store and online). The Sam’s Club Mastercard caps your annual cash back and only offers 1% cash back at Sam’s Club, thus losing this battle.

However, the inconvenient and inflexible reward redemption programs of both cards mean that most consumers will be better served getting an “ordinary” cash back credit card offering better cash back redemption and other features these cards lack, such as an introductory 0% APR and a generous bonus offer.

Thinking about using a personal credit card to fund your business? Check out our helpful guide to using personal credit cards for business.

The post Sam’s Club VS Costco Credit Card: Which Is Best For Your Business? appeared first on Merchant Maverick.

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How Health Insurance Works For Small Businesses With Only One Employee

How Health Insurance Works For Small Businesses With Only One Employee

Even though you are not legally required to purchase health insurance for a single employee by law, there are still great reasons to offer health benefits. In addition to attracting quality applicants for your position, your business also runs better when your employee is happy and healthy. And it may not be as expensive as you think.

Here is a quick rundown on procuring health insurance for both yourself and your employee. The good news? It doesn’t have to be a difficult process!

What Is Health Insurance?

How Health Insurance Works For Small Businesses With Only One Employee

Small business health insurance is medical coverage that helps you pay for general medical care, routine physicals and health exams, surgeries, and medical emergencies. Each health insurance plan is a unique combination of options that run the gamut between deductibles and no deductibles, copays or no copays, and choices about medical providers.

Is Health Insurance Legally Required For Small Businesses?

The answer to this question in general is: Maybe! But it’s not legally required if you only have one employee.

Here’s a break down of the recent health insurance laws and what they mean for your small business.

In 2010, the Federal Government passed the Affordable Care Act (ACA) and through that health care mandate, over twenty-million more Americans have had access to health insurance who didn’t before. Many of those people were sole-proprietors, independent contractors, and small business owners. Better known as “Obamacare,” the health mandate extended to employers and required businesses of a certain size to provide health insurance.

So, what exactly does the Affordable Care Act mandate? If your business is considered an Applicable Large Employer (ALE) with 50 or more full-time employees for more than six months out of the year, then you will need to provide your employees with health insurance as a legal requirement of the ACA.

If your business is not an ALE, then supplying health care for your employees is a choice. 

So as a small business owner with only one employee, you are not required to have health insurance. But, just because you don’t have to provide it doesn’t mean you should overlook health insurance as an option. Providing health care is not only a choice but also a wise investment in the happiness and well being of your employees, and the government offers tax credits to businesses with fewer than 25 full-time employees who supply health coverage.

Can You Have Health Insurance With One Employee?

How Health Insurance Works For Small Businesses With Only One Employee

Can you provide health insurance for your small business if you only have one other employee? Yes! You can! If your business consists of just you and one other person, you can offer health coverage in several ways. However, before you start shopping for plans, it’s important to understand what types of plans will be available to you and what you’ll need to show and prove to start the process.

What Constitutes An Employee?

Insurance companies have a specific definition of an employee. If you are looking into acquiring group health insurance for you and an employee, first you’ll have to prove that you actually have a single employee while you are filling out applications. According to the definitions, a common law employee cannot be you (the business owner) or your spouse. An employee is defined as someone whose workload you control, both in what that work is and how that work is performed — and that person must also be working at least 30 hours a week. An independent contractor cannot be considered an employee.

If you do not have a qualifying employee, group health insurance isn’t an option. Don’t let that discourage you from finding coverage, however. There are many independent and family plans available when during open-enrollment periods.

Can I Enroll In Group Health Insurance With One Employee?

If you have one employee as defined above (a person whose workload you control, who puts in at least 30 hours, and who is not your spouse), then you absolutely can enroll in group health insurance with one employee. If you have between 1-50 employees, the government’s Small Business Health Options Program (SHOP) group health plans are available to you.

SHOP will walk you through the process of determining eligibility, sending you to your state’s group health plan, or helping you compare and shop available plans in your area. After that, you can sign-up directly through the insurance platforms offered in your state or work with a SHOP broker who can walk you through the process. You will need to have information on the following aspects of your business:

  • Your business address
  • How many employees you are insuring
  • Employee ages, zip codes, number of dependents (sometimes tobacco use)
  • Business name
  • Tax ID

The Benefits Of Group Health Insurance

Even though group insurance isn’t your only option, it has many benefits. Here are some of the reasons why group health insurance is a worthwhile consideration:

  • Tax Credits: Under the guidelines of the ACA and the tax codes for 2019, you may be eligible for a tax credit if you enroll your business in group coverage and you have between 1-25 employees.
  • Lower Costs Than Individual Plans: Prior to the group health plans offered for small businesses with one employee, the alternative was to purchase individual plans. However, with each new person added on to a group plan, the cost per policy lowers.
  • Coverage Designed Specifically For You: Group health insurance broadens the plans and providers you can choose from, whereas with independent insurance, you get what you get. With group health insurance, you and your employee can discuss health options and choose a group health plan that fits with your needs. The opportunity to choose the deductibles and copays you want is one valuable reason to go through a group insurance provider.
  • Better For Your Business: Three-quarters of job-seekers say that health insurance and benefits are one of the key factors they are looking for in a job.

How To Enroll In Group Health Insurance

Once you’ve decided to enroll in group health insurance, you will need to gather your company’s information and your employee information to start the process. Here are the steps you’ll need to go through to fully enroll you and your employee with a group health insurance program:

Step #1: Set A Budget

Examine your business’s budget and ask yourself: How much money should I allot to health care? How much will I contribute per employee? You want to choose a plan that offers good coverage to your employee, but that also fits within your business’s budget. This will play a large role in which business insurance plan you choose. It’s vital to know exactly what you are paying for and what you might be asking your employees to pay for.

Step #2: Know What Plan & Benefits You Need

What kind of coverage are you hoping to offer? Go prepared to your first meeting with a provider or broker with an idea of what kind of policy would benefit your employee the most. Decide if you are going to include ancillary insurance options like dental and vision to the policy.

Step #3: Gather The Proper Documents

To receive an accurate health insurance quote from an insurance broker, you’ll need to provide some numbers and documentation. Before you call an agent or a broker, make sure you have gathered and prepared the proper documents. Most often, you’ll need to provide your:

  • Business address
  • Employee information
  • Business name
  • Tax ID

Step #4: Start Shopping

Whether you pass along your information to a broker or head to the SHOP site or other online sites for your state, now you’re ready to actually start shopping. Decide if you want to choose the broker approach or head out on your own. (If you decide to outsource to a Professional Employer Organization, they will take it from here!)

Step #5: Compare Quotes

Study the numbers and look at the plans. Sometimes the cheapest plan may not be in your best interest as a small business owner. Examine how much you can buy and how the plans work for your employees. Don’t be afraid to ask questions, push for numbers, and run scenarios with the experts. When comparing quotes and choosing the right health provider, do your research.

Read on for more advice about choosing the right health insurance provider for your small business.

Finding The Right Health Insurance Plan

How Health Insurance Works For Small Businesses With Only One Employee

Health insurance is a complicated issue and can feel overwhelming. So, how do small business owners (with all their extra free-time) navigate the system and find the perfect health plan choice? Start with understanding your needs as an employer; make sure you know the basic terms (co-pay, deductibles, co-insurance, out-of-pocket expenses), decide how much you can afford, and compare how different networks will work best. 

There are several ways you can compare and contrast providers and plans. Healthcare.gov offers ratings of health plans and under an in-network plan, you can plug their name into the system and see availability and ranking. You can then sit down with the list of providers in your area and look at their rankings as well.

See our longer post on small business health insurance for more things to think about as you make your choice.

Getting Started

If you can demonstrate you have one employee, then you are set to explore group health options for your company. The best place to start would be the Small Business Health Options Program (SHOP) group health plans. Tool around their site, enter your information, and see what options are available.

Health insurance is not a trivial purchase — your employees work harder and better when they feel protected and healthy. Now, with the addition of the tax benefits and expanded options, it’s easy to finally make it happen.

The post How Health Insurance Works For Small Businesses With Only One Employee appeared first on Merchant Maverick.

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Top Unsecured Lines Of Credit For Business

Business financing is an expansive topic covering many types of financial products. Everyone’s got a pretty good idea of what a loan is, but less familiar is the line of credit, arguably one of the most useful types of financing a business can secure.

We’ll take a look at what lines of credit are, the difference between secured and unsecured lines of credit, why you might want one, and where you can find them.

What Is An Unsecured Business Line Of Credit?

Have you ever had a credit card? If so, you have already have some experience with how a line of credit works.

When you use a credit card, you’re drawing on an amount of potential funding extended to you by the card’s issuer. You can use it as often as you want so long as the total amount you’ve used doesn’t exceed your credit limit. Most credit cards are revolving lines of credit, which means that as you pay off your balance, your credit becomes available for you to use again. Most lines of credit are revolving; the exceptions tend to be lines of credit extended for specific purchases, in which case once you use the credit, it’s gone for good.

Credit cards aren’t the only lines of credit out there, however. Lender-issued lines of credit may be slightly less convenient for making retail purchases, but have far better interest rates for those times when you need to carry a balance from month-to-month. This makes a line of credit one of the most versatile ways to fund your business, acting a bit like an insurance policy you can draw on when you need to.

Unsecured Vs. Secured Business Lines Of Credit

So what does that “unsecured” part of the phrase mean? Essentially the same thing it does with any other type of loan.

An unsecured line of credit does not require you to put up collateral as a condition of securing it. This means the lender can’t immediately seize a particular asset should you default on your line of credit. By comparison, a secured line of credit might require you to make a cash deposit or put up an asset as collateral.

Generally speaking, unsecured financial products have higher rates of interest to make up for the increased amount of risk the lender is taking on. On the plus side, you don’t have to worry about coming up with collateral.

Note that “unsecured” does not mean the lender can’t come after you if you default. Many lenders will require you to sign blanket liens, for example.

Top Unsecured Business Lines Of Credit

The first step toward getting an unsecured business line of credit is finding a lender who offers one. If you have a good relationship with your local bank or credit union, it’s worth inquiring about what they offer and their terms.

If those lines of credit are unavailable or out of reach, you still have options available to you. Many online lenders offer unsecured lines of credit. Here are a few suggestions.

OnDeck

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OnDeck offers up to $100,000 credit limits on unsecured lines of credit to customers with a credit rating above 600 who have been in business at least a year and have over $100,000 in gross annual revenue. It’s a good fit for profitable companies that don’t have stellar credit.

There is, however, a $20/month fee for keeping your line of credit open, but OnDeck will waive it for 6 months if you draw at least $5,000 from it during the first five days after opening the account. There is no draw fee.

BlueVine

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If you’re looking for a line of credit with a higher credit limit, you may want to consider BlueVine. BlueVine offers unsecured lines of credit in two forms, one with a six-month interval, the other with a 12-month. The 12-month version has higher rates than the six-month.

Rather than charge an administrative fee, BlueVine charges 1.2 – 2.5 percent per draw. You can pay your balance off at any time during your term, but you will be charged interest at a rate of 0.3 – 1.5 percent per week for six-month lines of credit, or 1.5 – 6.5 percent per week for the 12-month.

Kabbage

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If you’re having a hard time getting your credit up over the 600 mark, you can still get an unsecured line of credit. One such option is through Kabbage, which offers a credit line of up to $250,000 to businesses with at least $50,000 in annual revenue.

Like BlueVine, Kabbage offers lines lasting six-months or 12-months. There’s no draw fee, however. The interest rate system is a little confusing, so be sure to check out their loan calculator to get a sense of what you’ll be charged, and at what month of your term (yes, really).

Fundbox

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Another way to make an end-run around a bad credit rating is through Fundbox. They offer lines of credit to businesses with annual revenues of $50,000 or more who have had an active account with Fundbox-supported accounting software (Quickbooks, for example).

Funbox charges by the amount drawn, starting at 4.66%. You’ll then make weekly, automated payments to pay it off.

Fundation

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If you’re looking for better interest rates, have decent credit, at least $100,000 in annual revenue, and three or more employees, you may qualify for an unsecured line of credit from Fundation.

At 18-month term lengths, Fundation’s lines of credit run a bit longer than the other options we’ve listed. Just be aware that there’s a $500 closing fee and a 2% draw fee. Payments are made monthly.

Top Unsecured Business Credit Cards

Remember, most credit cards are a type of unsecured line of credit. In comparison to the offerings above, a business credit card shines when it’s used to make purchases you can pay offer within the interest-free grace period. Even better, business credit cards offer reward programs you can take advantage of to actually save money.

Here are a couple of options:

Chase Ink Business Cash

Chase Ink Business Cash



Compare

Annual Fee:


$0

 

Purchase APR:


15.49% – 21.49%, Variable

With no annual fee and a 5 percent top tier return on qualified purchases, Chase Ink Business Cash offers a lot of benefits with little risk. The card shines particularly brightly if you use it to buy office supplies or telecom services.

The only real downside is that the card caps the upper and middle tier rewards at $25,000, so if you’re spending more than that on office supplies or telecom purchases per year, you’ll only get 1 percent back after you’ve hit the cap.

Amex Blue Business Plus

Blue Business Plus Credit Card from American Express



Compare

Annual Fee:


$0

 

Purchase APR:


13.49% – 21.49%, Variable

If your purchasing needs don’t fall neatly into any one reward category, you may want to consider American Express Blue Business Plus. You’ll get 2 percent back on all purchases for the first $50,000 you put on your card per year. After that, you’ll get a 1 percent return.

There’s no annual fee, so you won’t have to do any fancy math to figure out whether or not you’re saving money by having the card in your wallet.

Final Thoughts

Unsecured lines of credit can be extremely useful tools for financing your business, and they come in enough variations that you can probably find one that fits your specific needs. Remember to keep their variable fee structures in mind, though, so you know when you’re paying and for what.

Not sure what unsecured line of credit you might qualify for? You can check your credit before the lender does. Does an unsecured line of credit sound like more trouble than its worth? Unsecured business loans might be what you need.

The post Top Unsecured Lines Of Credit For Business appeared first on Merchant Maverick.

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No Credit? Here Are The Best Credit Cards To Improve Your Score

credit cards no credit

One of the primary ways for people to build up their credit scores and establish a healthy credit history is to make monthly credit card payments on time. Of course, this begs the question: How do you build up your credit when you don’t have a credit card in the first place?

Thankfully, there are a number of credit cards that can help those with bad credit — or even no credit — cover daily expenses while boosting their credit scores. Most of them require a security deposit, after which you’ll be extended a credit line equal to that of your deposit. Unfortunately, for those with no credit, unsecured credit cards are hard to come by, though they do exist, as you’ll see.

Let’s delve deeper into the world of credit cards for those without credit.

Petal Visa Credit Card

Petal Visa Credit Card


Petal Visa Credit Card
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Annual Fee:


$0

 

Purchase APR:


15.24% – 26.24%, Variable

The Petal Visa credit card, issued by Utah-based WebBank, is a rarity in the credit card industry in that a) it is marketed specifically as a credit card for people with no credit history at all, and b) it is an unsecured card. You won’t have to make a security deposit in order to use the card! What’s more, your payments will be reported to the three major credit bureaus, thus building your credit (assuming you make your payments on time).

When you apply for the Petal Visa card, your income and spending will be analyzed to determine your creditworthiness, and while you can get approved without having a credit score, having a somewhat decent credit score may help you secure a higher credit limit.

The card offers credit limits between $500 and $10,000, which is quite generous for a card of this sort. The card also offers a variable APR of 15.24% – 26.24%, which is lower than that of many credit-building cards. Remarkably, the card charges no fees whatsoever — no annual fee, no foreign transaction fees, no late fees, and no penalty APR. Simply put, the Petal Visa card is a consumer-friendly product in a field where such products are few and far between.

The card has no rewards, cash back, bonus offer, or introductory 0% APR.

OpenSky Secured Visa Credit Card

OpenSky® Secured Visa® Credit Card



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Annual Fee:


$35

 

Purchase APR:


19.64%, Variable

The OpenSky Secured Visa card is a rarity in that the company does not check your credit when you apply, making this card ideal for somebody with no credit history.

As this is a secured card, you’ll have to make a security deposit of at least $200 which will establish your credit line. And though there are no rewards to earn and no bonus offers, the card does report your spending to the big three credit bureaus, making the OpenSky Secured Visa a solid choice if you need to establish a credit history.

Unfortunately, the card sports a $35 annual fee and a 3% foreign transaction fee. However, the card’s APR comes in at just under 20%, which beats the APRs of many credit cards pitched to people with no credit or poor credit.

Discover it Secured

Discover it Secured


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Annual Fee:


$0

Purchase APR:


25.24%, Variable

The Discover it Secured card is a traditional credit-building card in that it requires a security deposit. Your deposit, which must be between $200 and $2500, will become your credit limit. And like the other cards featured in this article, the card reports to the three major credit bureaus.

The Discover it Secured card offers an impressive level of rewards for a card of this type. You’ll earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and 1% cash back on all other purchases. What’s more, at the end of your first year, Discover will match all the cash back you’ve earned by that point. The card also carries no annual fee.

Secured Mastercard from Capital One

Secured Mastercard From Capital One



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Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

The Secured Mastercard from Capital One offers an unusual benefit for a secured credit card: You may be able to get a credit limit higher than the amount of your security deposit. If you’re approved, you’ll get an initial $200 credit limit, but your required security deposit will be either $49, $99 or $200, depending on Capital One’s assessment of your creditworthiness. You can also get access to a higher credit line after making your first 5 monthly payments on time.

While the card has no annual fee and no foreign transaction fee, you won’t earn any rewards for your spending. The card’s APR (currently at 26.99% variable) is also rather high, so you won’t want to carry a monthly balance if you can avoid it.

Journey Student Credit Card from Capital One

Journey Student Credit Card from Capital One


Journey Student Credit Card from Capital One
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Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

The Journey Student Credit Card from Capital One doesn’t require a security deposit and doesn’t require you to be a college student. Nonetheless, it offers some nice perks for students looking to build up their credit score. Sadly, you must have at least average credit to qualify.

The Journey Student Credit Card offers 1% cash back for all your purchases, but if you make your monthly payments on time, you’ll get 1.25% cash back for all your purchases each month you pay on time. It’s a nice inducement to pay on time if the prospect of boosting your credit score (the card reports to the credit bureaus, naturally) isn’t inducement enough!

The card carries no annual fee or foreign transaction fee, but like Capital One’s Secured Mastercard, the card features a high variable APR of 26.99%.

Spark Classic from Capital One

Spark Classic From Capital One


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Annual Fee:


$0

 

Purchase APR:


25.24%, Variable

The Spark Classic from Capital One is a business credit card for rebuilding credit. As such, the card comes with business perks such as free cards for your employees, all while helping you build your business credit score (the card reports to the business credit bureaus, not the personal ones).

One of the few cards available for business owners that requires only average personal credit, the card offers a modest cash back rate of 1% for all your purchases. It also features no annual fee and no foreign transaction fee.

The card’s high APR (25.24% variable) means that you should try to avoid carrying a significant balance from month to month.

Credit One Bank Platinum Visa for Rebuilding Credit

Credit One Bank Unsecured Platinum Visa


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Annual Fee:


$0 – $99 ($0 – $75 the first year)

 

Purchase APR:


20.24% – 26.24%, Variable

The Credit One Bank Platinum Visa for Rebuilding Credit (note that the issuer is Credit One, not Capital One) is a credit option for borrowers with bad/limited credit who can’t or won’t pay a security deposit. However, due to the fees involved, you might not want to make this card your first choice.

If you are approved to get this card, you’ll have to pay a $75 annual fee immediately, thus bringing your credit line down from $300 to $225. Unfortunately, after the first year, your annual fee may rise to $99/year. I say “might” because Credit One lists the post-1st-year annual fee as “$0 to $99”. The company also reserves the right to divide your annual fee by 12 and charge you on a monthly basis.

While the card offers 1% cash back on eligible gas and groceries plus mobile phone, internet, cable, and satellite TV services, only “qualified” Platinum Visa card members can receive 1% cash back rewards on all purchases. Credit One doesn’t explain how you can qualify for this.

Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card


business credit cards fair credit
Compare

Annual Fee:


$25

 

Purchase APR:


Prime + 11.90%

The Wells Fargo Business Secured Credit Card is one of the few secured business credit cards out there. Let’s take a closer look.

With this card, you’ll get a $500 to $25,000 credit line based on the amount you deposit. As for spending rewards, you’re given the choice between getting cash back and getting reward points. Choose cash back and you’ll also get 1.5% cash back on all your purchases and your cash back will be credited quarterly to your account.

If you choose reward points, you’ll get 1 point for every $1 spent on net purchases and 1,000 bonus points when your company spends $1,000 or more in any monthly billing period. You can redeem points for gift cards, merchandise, airline tickets, and more.

The Wells Fargo Business Secured card comes with an annual fee of $25 per card, no foreign transaction fee, and a relatively competitive APR. And while Wells Fargo states that your card activity “is shared with major credit bureaus to help build credit history,” the company does not specify whether these bureaus are business credit bureaus or consumer credit bureaus.

Citi Secured Mastercard

Secured Mastercard From Citi


best secured credit cards
Compare

Annual Fee:


$0

Purchase APR:


26.99%, Variable

The Citi Secured Mastercard is another secured credit card — one meant for people with no credit or a limited credit history.

The card requires a security deposit of between $200-$2,500 which will be the basis for your credit limit. Citi will report your credit activity to the major consumer credit bureaus.

There’s no annual fee, but the APR is relatively high and there are no rewards to accumulate or bonus offers to earn.

What You Need To Apply For A Credit Card

As you may not have applied for a credit card before, here’s what you’ll need to provide when you apply:

  • Your legal name
  • Your birth date
  • Your address
  • Your Social Security number (your Individual Taxpayer Identification Number (ITIN) may suffice if you don’t have a Social Security number
  • Your annual income

How To Use A Credit Card To Build Credit

free credit score monitoring service

The primary way that using a credit card helps you build credit is that when you make your monthly payments on time, most credit card issuers will report your activity to the major consumer credit bureaus, who will then take your payment activity into account when setting your FICO score.

However, there’s more to it than just that. Check out this article on using credit cards to build your credit for a more detailed look at the subject.

Final Thoughts

It’s a cruel catch-22: Having credit makes it easier to build credit. When it comes to the credit cards you can obtain with no credit history, the options are limited and imperfect.

Thankfully, as this article has demonstrated, you do have some viable credit card options when seeking to establish a healthy credit history. Of course, no matter what credit card you’re able to obtain, it won’t help your credit score if you can’t make your monthly payments on time. Use your new card wisely!

Here’s some additional information to help you on your credit journey!

  • How to improve your credit score
  • Using personal credit cards for business
  • How to build credit with a credit card

The post No Credit? Here Are The Best Credit Cards To Improve Your Score appeared first on Merchant Maverick.

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The Best Credit Cards Offered By American Airlines

best american airlines credit cards

Folks who travel regularly, both for business and for personal reasons, are likely to use frequent flyer programs to earn reward miles for their flights. As American Airlines is, by most metrics, the world’s largest airline, reward miles earned via American Airlines’s AAdvantage program are particularly useful.

One way to accelerate the rate at which you earn AAdvantage miles is to use an American Airlines co-branded credit card. Several such cards are available, so you might need a little guidance to find the card that makes sense for your particular needs. Thankfully, you can let us handle that part!

Here’s something you should know off the bat. All American Airlines credit cards offer the following rewards:

  • 2 AAdvantage miles for every dollar spent on eligible American Airlines purchases
  • 1 AAdvantage mile for every dollar spent on all other purchases
  • 25% savings on inflight food and beverage purchases

While each AA card shares these common features, the cards diverge from one another in other ways, such as fees charged, additional ways to earn miles, and travel perks. Let’s examine each American Airlines credit card and the primary selling point of each American Airlines credit card.

Credit Card Best For
AAdvantage MileUp Card No Annual Fee
CitiBusiness / AAdvantage Platinum Select World Mastercard Business Owners
Citi / AAdvantage Platinum Select World Elite Mastercard General Travel
Citi / AAdvantage Executive World Elite Mastercard High-End Travel Benefits
Barclays AAdvantage Aviator Red World Elite Mastercard Balance Transfers
Barclays AAdvantage Aviator Business Mastercard Bonus Offers

Best For No Annual Fee: AAdvantage MileUp Card

AAdvantage MileUp Card


AAdvantage MileUp Card
Compare

Annual Fee:


$0

 

Purchase APR:


18.24% – 26.24%, Variable

The AAdvantage MileUp Card’s value for the average traveler is enhanced by the fact that the card carries no annual fee. With most credit cards that earn airline miles, you have to weigh the miles you earn against the annual fee to see if you’re coming out ahead. If you don’t travel all that often, you might find yourself on the wrong side of this particular Mendoza line.

However, since the AAdvantage MileUp card carries no annual fee, you won’t have to weigh your benefits against your fee. Plus, not only will you earn the same double miles from your AA purchases as with every other AA card, but you’ll also earn 2 miles for every $1 spent at grocery stores.

This card doesn’t offer the same free checked bag perk offered by other AA credit cards. It is aimed more at the casual traveler or the entrepreneur who takes occasional vacations rather than at the frequent business traveler — a distinction highlighted by the double miles that accrue to grocery store purchases.

Unfortunately, this card requires excellent credit in order to qualify. There’s also a 3% foreign transaction fee, no introductory 0% APR period, and a relatively high APR.

Best For Business Owners: CitiBusiness / AAdvantage Platinum Select World Mastercard

CitiBusiness / AAdvantage Platinum Select World Mastercard


credit cards for entrepreneurs
Compare

Annual Fee:


$99 (waived for the first year)

 

Purchase APR:


17.99% to 25.99%, Variable

The CitiBusiness / AAdvantage Platinum Select World Mastercard is one of just two American Airlines co-branded cards currently being offered that is a business credit card. If you want to earn AAdvantage miles with your American Airlines travel and that of your employees, check out this card (or the Barclays AAdvantage Aviator Business Mastercard, which we’ll discuss later).

The card currently offers an impressive bonus offer of up to 60,000 AAdvantage miles: Earn 50,000 bonus miles after making $3,000 in purchases within the first 3 months and another 10,000 bonus miles after making a total of $10,000 in purchases within the first 12 months. You’ll also earn 2 miles for every dollar spent on gas, cable/satellite providers, select phone companies, and car rentals.

Along with the standard AAdvantage benefits, this CitiBusiness Mastercard offers additional perks befitting business travel, such as:

  • Preferred boarding on AA flights
  • 25% savings on American Airlines inflight Wi-Fi
  • First checked bag free on domestic American Airlines flights for you and up to four companions
  • Earn an American Airlines Companion Certificate worth $99 for domestic travel after $30,000 in purchases each cardmembership year (fees apply)
  • 24/7 personal business assistant to help with travel, hotel, and dining arrangements

The card does carry a $99 annual fee, though this is waived the first year. There is no introductory 0% APR period (boo!) and no foreign transaction fee (yay!).

Best For General Travel: Citi / AAdvantage Platinum Select World Elite Mastercard

Citi / AAdvantage Platinum Select World Elite Mastercard


Citi / AAdvantage Platinum Select World Elite Mastercard
Compare

Annual Fee:


$99 ($0 the first year)

 

Purchase APR:


18.24% – 26.24%, Variable

The Citi / AAdvantage Platinum Select World Elite Mastercard is the personal counterpart to the CitiBusiness card listed above. It’s the most well-rounded of the bunch and makes for a solid travel credit card for frequent travelers.

With this card, along with the AAdvantage miles you’ll earn on AA flights, you’ll earn 2 miles per $1 spent at restaurants and gas stations with no cap on the amount of miles you can earn. You’ll also get a bonus offer of 50,000 bonus miles after you make $2,500 in purchases within the first 3 months.

Some handy travel perks come with the Citi / AAdvantage Platinum Select World Elite Mastercard (I’m sorry each of these cards has such an annoyingly long and similar name). You’ll get preferred boarding on all AA flights and one free checked bag on domestic AA flights. You’ll also get a $100 AA Flight Discount after you spend at least $20,000 on purchases during your cardmembership year and renew your card. What’s more, there’s no foreign transaction fee.

There’s also a $99 annual fee, waived for the first year. The APR also happens to be on the high side.

Best For High-End Travel Benefits: Citi / AAdvantage Executive World Elite Mastercard

Citi / AAdvantage Executive World Elite Mastercard



Compare

Annual Fee:


$450

 

Purchase APR:


17.99% – 25.99%, Variable

The Citi / AAdvantage Executive World Elite Mastercard is the luxury option when it comes to American Airlines co-branded credit cards. This is apparent in the card’s whopping $450 annual fee!

As the most, well, “elite” of American Airlines’s credit cards, the Executive World Elite Mastercard comes with a host of great travel benefits:

  • 10,000 Elite Qualifying Miles after you spend $40,000 in purchases within the year
  • Automatic Admirals Club membership — access over 50 Admirals Club lounges and nearly 60 partner lounges worldwide
  • Global Entry or TSA PreCheck application fee credit
  • First checked bag free on domestic AA flights for you and up to 8 travel companions
  • Priority check-in, priority airport screening (where available), and priority boarding privileges for you and up to 8 travel companions
  • Dedicated concierge service

The card also comes with a bonus offer of 50,000 AAdvantage miles after you spend $5,000 on purchases within the first 3 months. And as you would expect of a luxury travel card, there’s no foreign transaction fee.

The card’s high annual fee means you’ll have to do quite a bit of traveling in order to fully reap the rewards of the card (or maybe you just really enjoy priority boarding and airport lounge access). If this is you and you don’t mind sticking to American Airlines for your air travel, check out the Citi / AAdvantage Executive World Elite Mastercard.

Best For Balance Transfers: Barclays AAdvantage Aviator Red World Elite Mastercard

Barclays AAdvantage Aviator Red World Elite Mastercard


Barclays AAdvantage Aviator Red World Elite Mastercard
Compare

Annual Fee:


$95

 

Purchase APR:


18.24% – 27.24%, Variable

The AAdvantage Aviator Red World Elite Mastercard is an AA co-branded credit card issued by Barclays, unlike the cards above, which are all Citi-issued. It also comes with two unique and striking benefits.

First, unlike any other American Airlines credit card, this card offers an introductory 0% APR for 15 months on all balance transfers posted to your account within 45 days of your account opening. Second, this card offers a huge bonus of 60,000 miles, and all you have to do to get it is to make a single purchase on your card within 90 days. Of course, you’ll also have to pay the $95 annual fee, as it is not waived the first year.

The card comes loaded with great American Airlines-related perks. You’ll get preferred boarding and one free checked bag for you and up to four companions on your reservation, plus dedicated concierge service. You won’t have to pay any foreign transaction fees, either.

Best For Bonus Offers: Barclays AAdvantage Aviator Business Mastercard

Barclays AAdvantage Aviator Business Mastercard



Compare

Annual Fee:


$95

 

Purchase APR:


18.24% to 27.24%, Variable

The AAdvantage Aviator Business Mastercard is an American Airlines co-branded business credit card issued by Barclays.

Compared to the CitiBusiness card, this Barclays AA business credit card has a bonus offer that is quite easy to obtain. With just $1,000 in spending in your first 90 days, you’ll get 60,000 AAdvantage bonus miles. Most businesses in the market for a business travel card should be able to hit this threshold without much problem.

While the $95 annual fee is not waived for the first year, you’ll be accruing benefits that will exceed this if you do a significant amount of business travel. Not only will you earn double miles on all AA purchases, but you’ll also earn $3,000 Elite Qualifying Dollars after spending $25,000 on purchases each calendar year. These Elite Qualifying Dollars boost your status in the AAdvantage program when you earn them, entitling you to more and better travel perks.

Other card benefits include a 5% bonus on your miles earned every year after your account anniversary date based on the total number of miles earned using your card, a free checked bag + preferred boarding for you and four companions, complimentary employee cards, and a Companion Certificate for a guest, worth $99, which you’ll get each year after your account anniversary after spending $30,000 or more on eligible purchases.

Final Thoughts

To reiterate a point I made earlier, American Airlines is the world’s largest airline. Therefore, AAdvantage miles are going to be more useful for more people than just about any other airline’s proprietary miles. The American Airlines credit cards we’ve detailed here can help you a) earn AAdvantage points on your flights to go towards further AA travel and b) gain access to a variety of different travel benefits and points-earning spending categories.

If you’re still looking around for the ideal credit card for your needs, check out these links!

  • Best airline credit cards for businesses
  • Best business credit cards for travel
  • Best free credit score sites

The post The Best Credit Cards Offered By American Airlines appeared first on Merchant Maverick.

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Everything You Need To Know About Small Business Property Insurance

Everything You Need To Know About Small Business Property Insurance

If you are a small business with a physical storefront, a location where you store your goods/supplies, or a strong inventory of vehicles and equipment, buying a commercial property insurance plan should be part of your risk management plan. Commercial property insurance is designed to protect your business from accidents, theft, fires, and some (but not all) Acts of God.

If the worst-case-scenarios for your property come to fruition, a solid commercial property insurance plan creates a way for your business to run and thrive despite the setbacks.

What Is Property Insurance?

Commercial property insurance is a policy of coverage that protects your business assets in the event of property damage. Accidents, fires, and vandalism are all covered by property insurance, and the policy not only provides compensation for damage to buildings but also damage done to products inside the building. Structures, fixtures, and equipment inside the building are protected under property insurance, but it’s best to check the policy and speak to an insurance expert to make sure your most important assets are included in the policy’s coverage.

When you file a claim, you can choose to receive the cash value of the destroyed items or the replacement value (how much it would cost to replace new). However, policies are often specific in what they’ll cover and what they won’t cover. Read on to see what is and isn’t covered in most policies.

What Property Insurance Covers

In general, the commercial policies will cover accidents, damage, and theft to your building and assets inside your building. In most cases, commercial property insurance policies will cover the following (although, as with any policy, ask questions about the coverage):

  • Damage and destruction from a fire
  • Losses and damage from theft and vandalism
  • Damage from tornados or a hurricane
  • Sinkholes
  • Smoke damage
  • Damage from aircraft or other vehicles crashing into your building
  • Damage from riots/civil unrest

What Property Insurance Doesn’t Cover

Most commercial property insurance policies will not cover everything and the list of things not covered is extensive. Most policies don’t cover flood, tsunamis earthquakes, and sewer backups among other things.

Sometimes the exact same damage is covered or not covered depending on how the damage occurred. For example, if your toilet backs up and sewage destroys your property, it isn’t covered. But if that same toilet backs-up because of vandalism, that is covered. Since policies vary by carrier, it’s important to learn exactly what is and isn’t covered by your insurance provider.

Who Needs Property Insurance?

Everything You Need To Know About Small Business Property Insurance

Most businesses need a basic type of commercial property insurance if they have a physical location for their business. The coverage will protect business assets in the event of damage to the property. Buildings, machinery, and some electronics are covered under the policy.

If your business is leasing or renting a commercial space, you will need to check with your landlord to see who is expected to carry the burden of insurance. Some landlords will still expect you to pay rent on a damaged building (and it is becoming more common that you will need to supply proof of insurance before signing a lease), so understanding your business insurance policy will help with surprises. Even if commercial property insurance is not required by a landlord, you don’t want to find yourself under-insured.

You should get commercial property insurance if you need to protect the following items:

  • A commercial space (that you either rent or own)
  • Computer and electronic equipment
  • Office furniture and supplies
  • Inventory and stock

Property Insurance VS. Business Owners Policy (BOP)

Everything You Need To Know About Small Business Property Insurance

Many business owners find that it is better to bundle their commercial property insurance policy with a general liability policy. This is known as a Business Owners Policy (BOP) and is often the most economical way to protect your business from the biggest claims for and against your business.

What Is A Business Owners Policy?

A Business Owners Policy (BOP) is a bundled policy that includes both property and liability insurance. Check with specific insurance providers about what their particular BOP entails. Under a BOP, many business owners can add extra insurance coverage that exceeds the basic coverage of a commercial property policy. (And if you have employees, a BOP can also negotiate worker’s compensation insurance into the bundle.)

What Does A Business Owners Policy Cover?

All Business Owners Policies (BOP) have general liability insurance and commercial property insurance bundled into one policy. General liability coverage protects your business from the cost of a lawsuit due to accident or injury to someone’s person or property. Additionally, a BOP includes commercial property insurance which provides protection to your assets in the event of damage to your property. Most BOPs also include business income insurance or additional coverage against theft through crime insurance. (Each policy is different and most can be tailored to fit your business risks.)

Additional Types Of Property Insurance

Everything You Need To Know About Small Business Property Insurance

When you start shopping for commercial property coverage, you’ll want to know what you can add to your policy to make sure it is the best fit for your business. Most commercial property policies don’t cover earthquake damage or flooding. Are you in an area where the fault lines aren’t predictable? You’ll want extra coverage. Is your business’s location prone to flooding? You’ll want additional flood insurance.

It’s important to ask about additional policies to cover the following possible situations if they are risks for your area/business type:

  • Water damage due to flooding/tsunamis
  • Damage from earthquakes
  • Mold damage
  • Acts of war
  • Debris removal
  • Employee theft
  • Sewage backups
  • Loss of business income from closure

Which Type Of Property Insurance Is Right For You?

Type of Insurance What It Covers Who It Is For

General Liability

Protects your business from the threat of a lawsuit

All businesses

Property Insurance

Protects your building and things inside your buildings from damage and accidents

Businesses with a physical property site and products located in those physical locations

Business Interruption

Provides resources if your business is forced to stop or relocate

Businesses located in riskier areas and businesses who might work with vendors in risky areas

Commercial Auto Insurance

Provides protection from accidents on your commercial vehicles

Businesses that rely on automobiles to do business

Workers Compensation

Provides protection to you and your employees should they become injured on the job

All businesses

Professional Liability (E&O)

Protects your business during a lawsuit if your business commits errors or malpractices

Any business that provides a service

Product Liability Insurance

Protects a business from a lawsuit related specifically to the product it sells

Any business that manufactures, sells, or distributes a product

Home-Based Business Insurance

Protects any business-related items inside your home not covered by home owner’s insurance

Any business owners running out of their own homes

Business Owners Policy

Includes both general liability and commercial property insurance

All businesses

Umbrella Insurance

Provides a bigger ceiling for the legal costs of a lawsuit that extends your liability coverage

All businesses

Whether you are buying a commercial property policy separately or as part of a business owner’s policy, knowing which types of insurance are available will help you make the most informed decision for your business. Here are the types of policies you can add to your general liability policy.

  • Direct Damage Property Insurance: This is your standard commercial property insurance. The policy covers any direct damage to your business location and damage to business property.
  • Business Interruption Insurance/Business Income Insurance: After a disaster, the business may need to close its doors for a bit. This insurance covers the lost income due to a closure and it also helps provide protection for expenses related to the closure (temporary locations, moving supplies, etc.).
  • Extra Expense Insurance: For businesses that cannot afford to close (a 7-day business like a clinic or a security center), in the event of a disaster or interruption to the business, this policy helps provide the finances to move to a new location or minimize the financial effects of a shutdown. It is similar to business interruption service but targeted specifically toward the extra expenses of moving a business to a new location.
  • Leasehold Interest Insurance: If a business loses its lease (especially if they had a nice lease, under market-value), this insurance covers the financial loss of losing the lease. It can also help pay back a business owner for betterments to the space that they are leaving.
  • Fine Arts Coverage: If you decorate your space with tapestries and rugs and paintings, you might need fine arts coverage if you’d want to replace it after a disaster. Because fine art needs a valuation, someone who purchases this floater coverage would want to itemize their art. However, this is specifically designed for people who use fine art as decoration and have no intention of selling it. (That would require a larger insurance policy.)
  • Contractors Equipment Coverage: This additional coverage specifically covers and replaces equipment and tools that are either damaged or goes missing on a job site. For contractors and construction businesses that might have expensive tools in a variety of locations, this floater will specifically insure machinery and tools.
  • Cyber Liability Coverage: If you are the victim of hacking or a data-breach, and your customer data is leaked (including social security or credit card numbers), it can cost your business a lot of money to comply with federal guidelines. This coverage helps pay legal fees and protects you from lawsuits arising because of the data breach. If your business is online or you collect information online, this is an important addition to your plan.
  • Electronic Data Processing Coverage: This insurance protects the equipment and the data that you collect. This is a policy that bridges a gap in your commercial policy between what electronic equipment is insured after an accident or disaster. With this add-on, your computer hardware, as well as software and data information, is all insured.
  • Employee Theft Insurance: If a dishonest employee steals equipment, money, or securities, the losses are covered under this additional policy added to your commercial property plan. This plan will even cover the losses if you don’t know which employee committed the crime, and it is part of the crime add-ons to a commercial property policy.
  • Inland Marine Insurance: A commercial property policy will only cover items at a specific business location, so what if your equipment and business materials travel from one place to another? This type of insurance covers things in transit or an instrument of transit or any equipment that is moveable.
  • Debris Removal Insurance: This section of property insurance covers the cost of removing debris after an accident or Act of God. While property insurance may cover the cost of repair, without this specific add-on to your policy, the cost to remove garbage and debris may fall on you as a business owner.

Buying Property Insurance

Once you’ve decided to invest in commercial property insurance, you’ll now need to decide what type of coverage is best suited for your business and make a list of assets you’d like to protect. After that, read our article on the steps needed to buy insurance. There are four quick steps to getting yourself secured with the right policy.

  1. Assess your risk and choose which insurance you need.
  2. Gather the necessary business information (in this case, you’ll need specific details about your commercial property including square footage).
  3. Comparison shop the costs. (You can use comparison sites like Coverwallet, Coverhound, and Insureon, or contact your local insurance provider to see what commercial plans are available.)
  4. Purchase your insurance!

Commercial property insurance is important to provide needed protection for your building and the assets inside your building. Whether it’s a fire or an unruly mob of people, if your property is damaged, don’t be left to pick up the pieces on your own. Find a policy that will give you peace-of-mind and adequate coverage to the things that matter most.

The post Everything You Need To Know About Small Business Property Insurance appeared first on Merchant Maverick.

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Best Fuel Cards For Truckers And Trucking Companies

best fuel cards for truckers

Fuel cards (also known as fleet cards) are unique payment instruments designed to help trucking companies save money on the cost of fuel and maintenance as well as monitor their workforce’s spending. These cards are accepted by fuel vendors that comprise the network of locations that accept the card in question. Generally, these networks will cover over 10,000 gas stations nationwide, though a few such networks feature hundreds of thousands of individual gas stations.

Let’s take a closer look at the fuel cards that best fit your trucking business.

Best for Fuel card
No monthly charges ExxonMobil Business Fleet Card
Small & mid-size companies WEX FlexCard
National coverage Shell Fleet Navigator Card
Rewards Fuelman Advantage Platinum Mastercard

Best For No Monthly Charges

ExxonMobil Business Fleet Card


ExxonMobil Business Fleet Card
Compare

Annual Fee:


$0

 

Purchase APR:


N/A (charge card)

The ExxonMobil Business Fleet card offers a rebate of up to 6 cents per gallon on your fleet’s fuel purchases depending on the total gallons purchased per billing period. Additionally, there are no monthly charges associated with the card and no setup fees.

The ExxonMobil Business Fleet card’s rebate structure is as follows:

  • Less than 500 gallons purchased during billing period =  1¢ per gallon
  • 500 to 3,999 gallons purchased = 3¢ per gallon
  • 4,000 to 6,999 gallons purchased = 4¢ per gallon
  • 7,000 to 9,999 gallons purchased = 5¢ per gallon
  • 10,000+ gallons purchased = 6¢ per gallon

The ExxonMobil Business Fleet Card is a charge card. As such, the card doesn’t carry an APR since you can’t carry a balance from month-to-month.

With the ExxonMobil Business Fleet card, you’ll be able to view all of the following from your online account:

  • Card and driver detail
  • Payment history
  • Available credit
  • Manage invoices and payments
  • Set restrictions on purchase types
  • Set limits for transactions, gallons, and dollar amounts
  • Set specific limits for time-of-day and day-of-week
  • Receive notifications when expenses fall outside your company policies

One word of caution: This card is only good at the 10,000 Exxon and Mobil stations in the US. These stations are most prevalent in the eastern US.

Best For Small & Mid-Size Companies

WEX FlexCard


WEX FlexCard
Compare

Annual Fee:


$24 per card

 

Purchase APR:


N/A

For a fuel card that will both help you save on fuel and cover fuel purchases nearly everywhere your fleet goes, check out the WEX FlexCard.

Like the ExxonMobil Business Fleet Card, the WEX FlexCard is a charge card — but unlike the ExxonMobil card, the WEX FlexCard allows you to carry a balance for up to 26 days. And while the FlexCard’s 3¢ rebate on every gallon of fuel purchased falls short of the maximum rate of the ExxonMobil card, it equals or exceeds said rate if you purchase less than 4,000 gallons of fuel per billing period. As such, it’s a great fuel card for small and mid-sized fleets.

The WEX FlexCard is accepted at over 90% of fuel stations nationwide. This comes out to over 160,000 US refueling locations and 45,000 US service locations.

The Wex FlexCard does carry a monthly fee of $2 per card, though this shouldn’t put that big of a dent in your profits.

In addition to the above features, WEX’s fleet management and fuel management services can, when used in tandem, help you save even more on fuel — up to 15% by the company’s estimation.

Best For National Coverage

Shell Fleet Navigator Card


Shell Fleet Navigator Card
Compare

Annual Fee:


Unspecified “limited fees”

 

Purchase APR:


23.00%, Variable

If you’re looking for the fuel card with the maximum possible coverage, you’d do well to investigate the Shell Fleet Navigator Card.

This fuel card is accepted at fully 95% of gas stations across the US, including all 14,000+ Shell and Jiffy Lube locations. You’re exceedingly unlikely to be left high and dry by the Shell Fleet Navigator Card.

The card comes with spending controls and expense management systems on par with every other fuel card out there. What’s more, the Shell Fleet Navigator card is not a charge card. Instead, the card is akin to a traditional credit card in that you can carry a balance from month-to-month.

The Shell Fleet Navigator Card also offers a rebate of up to 5 cents per gallon of fuel purchased each billing cycle depending on the amount spent. Unfortunately, Shell doesn’t disclose the amount of fuel per month you need to purchase before the 5 cent rate takes effect. Likewise, while the card doesn’t officially carry an annual fee, Shell states that the card may carry “limited fees” — though these fees are not detailed by the company.

Best For Rewards

Fuelman Advantage Platinum Mastercard


Fuelman Advantage Platinum Mastercard
Compare

Annual Fee:


$0

 

Purchase APR:


N/A

The Fuelman Advantage Platinum Mastercard is another card with near total US coverage — you can use this card at any location that accepts Mastercard. But that’s just the beginning of the benefits you’ll get from using this card. (I like to think these cards are named for someone who just happens to be named Fuelman)

With this Fuelman card, you’ll get up to 3¢ per gallon in rebates on your fuel purchases depending on the volume of fuel you purchase each month (sadly the exact volume/rate data is not provided by the company) and an additional 2-3¢ per gallon when you use gas stations that are a part of the Fuelman Discount Network.

This discount network will also get you a 3 5% rebate on purchases at Firestone and Tires Plus Retail Locations.

This card is a charge card and it carries no annual fee.

Best Prepaid Fuel Cards

Let’s change gears here (get it?) and discuss prepaid fuel cards. Now, a prepaid fuel card is not the same thing as an actual fuel card. Essentially, a prepaid fuel card is just a gift card that can be used at a gas station, and as such shares little in common with either fuel cards or credit cards. Nonetheless, prepaid fuel cards can be quite useful for the company whose operations involve a degree of road travel, and, as such, I thought I should mention them here. These cards aren’t for mid-size to large trucking companies.

Shell Refillable Card

The Shell Refillable Card can be used at all Shell locations. Up to $300 can be loaded onto the card at one time. You can track the balance and your spending online.

If your company’s driving needs are limited and you want to make sure only fuel is purchased on the company dime, consider using the Shell Refillable Card.

ARCO Prepaid Fuel Card

The ARCO Prepaid Fuel Card is nearly identical to the Shell Refillable Card, except you use it at ARCO stations. It is a good prepaid gas card to use on the west coast where most ARCO stations are located.

If you’re a west coast company with limited driving needs, you might want to give ARCO Prepaid Fuel cards a look.

Are Fuel Cards Worth It?

Let’s move on to the larger question of whether or not fuel cards are worth getting in the first place.

If your business uses two or more company vehicles for travel and your company purchases over 1,000 gallons of fuel each month, it may be worth it to get a fuel card. This is true for the following reasons:

  • Fuel cards come with in-depth purchasing controls to ensure your employees are using the company card for driving-related expenses only
  • Advanced analytics can improve your drivers’ efficiency
  • Monthly/annual fees tend to be small or nonexistent
  • Save money, both on gas purchases and on repair/maintenance costs
  • Advanced GPS apps that point the way toward in-network gas stations and service centers

Of course, the fact that fuel cards can only be used to purchase fuel and repair/maintenance services means that fuel cards are much less flexible than credit cards. Additionally, rewards programs associated with fuel cards tend to be more limited than those of credit cards, as only certain gas stations participate in said rewards programs.

Also, consider the fact that most fuel cards are charge cards. This means you won’t be able to carry a balance from month-to-month, giving you less leeway when paying your bills. Also, the fuel cards that do allow you to carry a balance never come with an introductory 0% APR offer. In fact, fuel cards just about never offer any signup bonuses.

What To Look For In A Fuel Card

Here’s what you need to keep in mind when looking for a fuel card:

  • Get a card that fits your location — Many fuel cards can only be used at certain gas station chains or within networks that cover certain regions of the country and not others. Look into exactly where a fuel card can be used before deciding on one.
  • Get a card that fits the amount of fuel you purchase each month — Many fuel cards offer rebates on fuel purchases, but these rebates are often tied to how much fuel your company buys each month. Try to determine how much fuel per month your company will be using before getting a fuel card. This way, you can find the card with a rebate program that best caters to your fuel “sweet spot.”
  • Understand how the fuel pricing works when considering a fuel card — Some fuel cards allow you to batch your fuel purchases after a certain length of time. This means you may be able to pay less than the price listed at the pump, but this pricing scheme can also come with its own fees and requirements. Be sure to understand how pricing works before obtaining your fuel card.

Final Thoughts

Trucking companies have their own particular financing needs, just like any specialty industry. The fuel card is one of the tools by which your business can save on the cost of fuel and keep employee spending under control.

To learn more about how to set up your trucking business for growth, let Merchant Maverick lend you a hand.

  • Best business loans for trucking companies
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What Is Credit Card Tokenization?

Tokenizing Payments

While tokenization in the payment security space may be relatively new, evolving, and even somewhat complicated, the concept of substituting one bit of information for another to protect something is anything but new. Tokenizing protects sensitive or personal data by replacing it with a “token” — a code word, essentially, though that might be oversimplifying the matter. Because the token is a substitute for the actual data, it holds no value if intercepted by fraudsters. You would need a way to decode the token in order for it to have any value. 

In this post, we are going to focus on credit card tokenization, but you should also know that tokenizing other types of highly sensitive data like social security numbers and personal records may become commonplace across markets — and very soon.

But back to the payment industry. As of late, the idea of tokenization is typically linked to digital wallets like Apple Pay and Android Pay, and for good reason. But there are many implementations of tokenization technology including:

  • Card-on-file subscription billing
  • One-click checkouts on eCommerce sites
  • In-app payments
  • All NFC mobile wallets (contactless payments)

Whether you are a brick-and-mortar shop wanting to implement contactless payment options for your customers, you have an online shop, you use an app to support your business, or you have regulars you know and love, you could start taking advantage of credit card tokenization.

And if you’ve bought anything via those methods listed above (who hasn’t?) in the last couple of years, the chances pretty good that your data was tokenized. So what is tokenization?

Tokenization Defined

When we define tokenization, it’s worth mentioning that while the main crux of the matter is consistent, no one-size-fits-all definition is universally accepted among the big payment security organizations like PCI and EMV. However, here is a simplified version, as given by the PCI Council, that gets to the heart of the matter:

Tokenization is a process by which the Primary Account Number (PAN) is replaced with a surrogate value called a token.

When we look at the PAN, which is the actual account number on your credit card, remember that other sensitive pieces of data connect to it — including your personal information and expiration date of the card. When we tokenize, we place all of that information farther from merchants, cashiers, and other players in the payment process. And because the data is no longer recognizable in its token form, we protect it across the payment process. A token’s life can be for just one interaction to get coffee, or a store could tokenize payment data for a specific customer for a limited amount of time.

Also, notice in the definition I shared in bold above, that there is no defined “how,” because it depends on how you implement the tokenization process and what application your business needs. Here are a few examples to help shed some light on how sensitive data gets tokenized.

How The Account Number Gets Tokenized

There are two ways to tokenize data: partial or total. They each have their advantages but may not be right for all situations.

First up, let’s talk about partial tokenization. In some cases, the middle six digits of a customer’s credit card get replaced with a token. The first group of numbers doesn’t get tokenized so that the processor knows what type of card they are dealing with (Visa and MasterCard have unique identifying numbers). Additionally, the last four digits of the PAN also remain intact for customer reference. This type of partialized tokenization is also backward compatible, meaning the token has the same amount of numbers as the real PAN. It “looks like a real card and acts like a real card” when a merchant enters it into their own POS system. If a merchant wants to tokenize data and keep their legacy system, this is one way to do it.

The other way to tokenize the PAN is to completely randomize all of the numbers. All of this is done by a third-party, and may include vault storage to keep the payment card data. In either case, the same general thing happens in a sale; the tokenized number is de-tokenized and matched with the real card data. More on that below.

What Happens During A Tokenized Sale?

When it comes time to process a payment, whether that is through an eCommerce site, an app, or a mobile wallet, the payment processing steps are generally similar. Here is a simplified process for your perusal below.

  1. The customer initiates payment for a product or service.
  2. Next, the merchant sends the token to the acquirer.
  3. Acquirer routes the token to Visa’s network.
  4. Visa sends a token to the card issuer.
  5. Issuer returns token and authorization.
  6. Viola! A sale is complete.

Check out the screenshot below for a visual example of tokenization, courtesy of Visa’s Infographic, How Tokens Are Used.

Tokenization

As we’ve discussed, tokenization relies on a completely random, traceless value as the surrogate. This process is unlike encryption which relies on a mathematical algorithm. Let’s take a look at how tokenization and encryption compare.

Tokenization vs. Encryption

Tokenization and encryption are similar in that the data is “hidden” from would-be interceptors, but the process of each is totally different. In tokenization, the customer data gets replaced with a token — a completely random number. In tokenization, typically a vault stores all of the actual data on a “table.” After de-tokenization, this random string of digits (sometimes alphanumeric) are matched up with the real account. The main takeaway here is that the token gets passed to the merchant and eventually back to the table, without exposing the real payment card information to the merchant.

With encryption, the payment card information runs through an algorithm, a mathematical process, to transform the original data into something indecipherable until unlocked with the “key” during processing. Since the process isn’t randomized, the algorithm is somewhat vulnerable to hackers trying to crack the code.

In short, encryption is mathematically reversible, and tokenization is not. Additionally, encryption is not a complete, end-to-end security method, like tokenization. Payment processing costs can be a bit higher with encryption as it requires more computational power (e.g., rotation of “keys”) than tokenization throughout the payment processing cycle.

Considering The Pros & Cons

While tokenization can be cheaper to implement per transaction than encryption, and it isn’t mathematically reversible, there are some issues to consider. Because vaulted tokenization requires central management, there is a lot of pressure to maintain a wholly secured vault (however, sometimes the issuer (e.g., Visa) hosts the vault, too).

Additionally, tokenization does significantly reduce PCI scope for merchants, meaning there is less pressure on the merchant for payment security overall. That means less work for you to do in order to remain PCI compliant. While encryption is a generally accepted security measure, it does not do anything to reduce your PCI scope or lessen the work you must do to stay PCI compliant. 

However, tokenization is still a relatively young whippersnapper in the world of payment security. Encryption has been around for a while, and consumers regard it well. But tokenization has become more attractive to those who understand that the payment security industry must stay a step ahead.

Tokenization’s Protective Role In Payment Processing

Tokenization Vault Security

There are a few ways that tokenization protects information during payment processing. As mentioned before, customer data is made useless to a would-be interceptor because it’s no longer the actual information; it is a token that substitutes the actual data. The other way that tokenization protects data is that in the case of digital wallets, the credit card number isn’t stored on the customer’s device, either. That means thieves can’t retrieve credit card numbers from a phone, tablet, watch, or connected device when a customer and a merchant utilizes a digital wallet.

As the payment security industry evolves, we’ll continue to move further away from sharing a physical card and any identifying information that comes with it. Tokenization successfully separates our sensitive data from the transaction by taking the physical card out of the equation entirely, and it does this by tokenizing parts or all of the credit card number.

Because tokenization also removes the merchant from the equation when it comes to transmitting highly sensitive data, it also significantly reduces a merchant’s risk to fraud — from both internal and external threats. That being said, there are some things to consider depending on how you implement tokenization.

How Can Merchants Adopt Tokenization?

There are several ways that you can adopt tokenization into payment processing for your physical, eCommerce shop, or your mobile app! The simplest way for the brick-and-mortar shop to tokenize payments is to get a contactless, NFC-capable reader. Mobile wallets already tokenize the data so as long as you can accept payments from these mobile wallets without having to do anything yourself. As far as tokenizing other transactions, you can ask your existing payment processor about tokenization options for your POS. If you are an eCommerce shop or you have an app, MasterCard and Visa both offer solutions, too.

Mastercard offers a free, optional service called Digital Secure Remote Payment (DSRP), and all you need to do is contact your acquirer to see if they support DSRP, and then integrate the mobile app with the digital wallet partner. You can also look into the Visa Developer Platform — a program offered by Visa where their team works with you to create your mobile payment application with Visa Token Service SDK.  

Sometimes, there is more to the whole tokenization shift than patch-on solutions, however. If your business has a tremendous legacy system with other data to consider, a more complex, third-party solution may be necessary. While we won’t get into all the nitty gritty in this post, here are a few things to consider below.

Companies Specializing In Tokenization

If you inherently deal with sensitive information as a part of your business model and you need to create a custom solution, you will need to find a PCI compliant company with a trustworthy, highly secure tokenization method and vault. Here are some things to ask:

  • How are tokens randomized? How protected is the “key” that de-tokenizes?
  • Is a reversible algorithm used? If so, how protected is that software?
  • And ultimately, how protected is the table holding the data and the vault protecting it?

While it becomes a bit more tricky to ensure that all of the right security measures are in place, tokenization can still reduce your risk as a merchant and help protect data from a breach. However, you’ll need to ensure due diligence when it comes to new or legacy systems. The PCI Council says it best in the PCI DSS Tokenization Guidelines Document:

Tokenization solutions can vary greatly across different implementations, including differences in deployment models, tokenization and de-tokenization methods, technologies, and processes. Merchants considering the use of tokenization should perform a thorough evaluation and risk analysis to identify and document the unique characteristics of their particular implementation, including all interactions with payment card data and the particular tokenization systems and processes.

Do You Need Tokenization To Process Credit Cards?

Keep in mind that at this point, there are no hard and fast rules as to exactly how to implement tokenization, so if you are a merchant, the ball is in your court to make the best decision for your business needs. That being said, tokenization can significantly reduce the merchant’s liability when it comes to payment security. And keep in mind: You don’t have to carry the burden of tokenization yourself. There are ways to utilize the expertise of other companies and hardware to get the job done. If your business is just looking to improve payment processing and you don’t need or want to store sensitive payment card or personal data, using the solutions discussed in this post provide a much simpler way to navigate tokenization.

While it’s not mandatory — and is undoubtedly flexible in implementation –, tokenization remains one of the fastest growing ways to keep data more secure and shift the risk of fraud away from the merchant while protecting the transaction from end to end.

The post What Is Credit Card Tokenization? appeared first on Merchant Maverick.

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Lowe’s Credit Cards VS Home Depot Credit Cards – Which Is Right For Your Business?

Lowe’s and Home Depot are two of the biggest home improvement juggernauts. Like many big box stores, they both offer an array of co-branded credit cards.

These cards give you rewards or pay lower interest rates when you buy at either store. This makes them appealing options if you frequent either Lowe’s or Home Depot. Should you have both stores nearby, selecting the right card could ultimately save your business a decent amount of money.

Ready to find out the best Lowe’s or Home Depot options for your business? Read through to find out!

Best Standard Credit Card: Lowe’s Business Rewards Card From American Express

Lowe’s Business Rewards Card from American Express



Compare

Annual Fee:


$0

 

Purchase APR:


17.99% – 26.99%, Variable

For businesses that shop frequently at either Lowe’s or Home Depot, but need a card that can be used elsewhere as well, there’s only one choice: Lowe’s Business Rewards Card From American Express. That’s because all of Home Depot’s cards can only be used in-store, and the rest of Lowe’s offerings can only be used in-store, too.

This Amex card features three points per dollar spent at restaurants and U.S.-based office supply stores, and on wireless telephone services purchased straight from U.S. service providers. You’ll then collect two points per dollar spent on Lowe’s purchases and one point per dollar on everything else. On top of those rewards, you’ll also get 5% off when buying at Lowe’s—effectively giving you 7% back when buying from the home improvement store.

Once you get your rewards, you’ll be able to redeem them for Lowe’s or American Express gift cards. Besides the base rewards scheme, this card lets you snag 5,000 bonus points after you spend $100 in your first 30 days.

You’ll also get access to standard credit card features. These include employee cards, an extended warranty of up to two years, purchase protection against theft and damage, and travel insurance. Additional bonuses include no annual fee, although there is a foreign transaction fee of 2.7%.

Best Store Card: Lowe’s Advantage Card

Lowe’s Advantage Card


Lowe’s Advantage Card
Compare

Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

When it comes to a basic in-store card, Lowe’s takes the cake again. The Advantage Card nets you 5% off eligible Lowe’s purchases as its base rewards feature. This discount cannot be used in combination with coupons, price-matching, or various other discounts, including military and employee ones.

You can also opt out of the 5% discount and into two different special financing options. The first financing method scores you six months 0% APR on purchases above $299.

Lowe’s second option (called “project financing”) enables special financing on purchases above $2,000. Here’s its payment table:

  • 36 fixed monthly payments at 3.99% APR
  • 60 fixed monthly payments at 5.99% APR
  • 84 fixed monthly payments at 7.99% APR

If either financing option is selected, the 5% discount will be voided. With this in mind, the financing routes should only be used when necessary. Note that despite these special financing rates, the Advantage Card’s standard APR sits rather high.

Also, this is not marketed as a business-specific card; however, using a personal card for business can still be an excellent option.

Best Rewards Program: Lowe’s

Keeping with the theme, Lowe’s has the best overall rewards program. The reason for this is simple: every Lowe’s card features—at the bare minimum—5% off every purchase made with Lowe’s. Home Depot, meanwhile, either offers a convoluted gas discount with their Commercial Account Credit Card and Commercial Revolving Charge Card or no rewards at all.

Besides that 5% off, Lowe’s includes additional rewards with their American Express co-branded business card. This means that the Business Rewards Card can ultimately collect up to 7% cash back if you’re using it at Lowe’s. This rate is very impressive and is ultimately one of the best cash back rates across all credit cards.

Home Depot’s lone rewards program (bundled with the Commercial Account and Commercial Revolving cards) features a $0.10 per gallon savings when you fuel up at Shell and other select gas stations for every $100 purchased at Home Depot. Because you’re able to buy up to 20 gallons of gas with the savings in effect, you essentially get 2% cash back earmarked for gas.

Best For A Large Purchase: Home Depot Project Loan Card

Home Depot Project Loan Card


Home Depot Project Loan Card
Compare

Annual Fee:


$0

 

Purchase APR:


7.99%, Fixed

While Lowe’s leads the way in most categories, Home Depot still has one trick up its sleeve. That trick comes in the form of their Project Loan Card.

Aimed at those working on large projects, this card is technically a loan. You’ll be able to receive a loan between $2,500 and $55,000. It offers a fixed APR of 7.99%. You’ll have 84 months to pay off the loan and can pay in-full early without penalty.

Once approved for the Project Loan Card, you’ll have a six-month window to buy products or installation services. There are no annual fees included with this card. However, because it is ultimately a loan, you won’t score any rewards like you might with a regular credit card.

Best APR: Lowe’s Advantage Card

Lowe’s Advantage Card


Lowe’s Advantage Card
Compare

Annual Fee:


$0

 

Purchase APR:


26.99%, Variable

For the best APR, we come back to the Lowe’s Advantage Card. While its standard APR is higher than most cards, the special financing attached with this card sets it apart.

As mentioned earlier, you’re able to forgo the card’s 5% discount on Lowe’s purchases and instead choose one of two financing options. The initial option grants you six months 0% APR on purchases above $299.

For the second option, you can nab special financing on purchases at Lowe’s that are above $2,000. Its rates and time frames are as follows:

  • 36 fixed monthly payments at 3.99% APR
  • 60 fixed monthly payments at 5.99% APR
  • 84 fixed monthly payments at 7.99% APR

Other cards may offer better standard interest rates. However—because of its pair of options—the Lowe’s Advantage Card makes a great tool for those making a large hardware purchase and needing to carry a balance.

Final Thoughts

All told, Lowe’s generally offers the better cards. Between higher reward rates and more appealing APRs, Lowe’s cards are simply more appetizing. However, Home Depot still has an excellent option if you need a larger loan for a project.

Didn’t find a card you’re looking for? Get a bigger picture on all of Lowe’s credit cards. Or take a peek at Home Depot’s offerings.

The post Lowe’s Credit Cards VS Home Depot Credit Cards – Which Is Right For Your Business? appeared first on Merchant Maverick.

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What Is An SMS Payment And How Does It Work?

We all know and love our Short Messaging Service (SMS) — better known simply as the text message. But did you know that you can start taking SMS payments for your business? And that it is relatively easy to get started?

In the United States, we are just now warming up to the idea of sending and receiving payments by text, but businesses throughout the world have already adopted SMS payments for everything from mass transit tickets to lattes.

While Americans are less likely to pay by text for everyday purchases, text payments are still an undeniably growing trend. You may already be familiar with payments by text when it comes to charitable donations, but home service providers (e.g., AT&T) are starting to offer SMS payments for their customers as well.

Text payments offer potential growth for many other types of businesses, too. Pizza shops, salons, or any business that has ‘regulars’ could benefit from text payments. SMS payment services are probably not for everyone, however, so let’s take a look at how text-to-pay works and if it’s right for your business.

How Do SMS Payments Work?

SMS Ordering

When it comes to the nuts and bolts of how SMS payments work, it’s pretty simple, really. While there may be some variations with each company that offers text messaging payment services, generally you can expect the following elements when it comes time to pay:

  1. A business sends a text to their customer’s phone number or the customer texts a shortcode number to the business to initiate the sale.
  2. After communicating what product or service the customer wishes to purchase, the business sends the customer a link to a secure, mobile-friendly payment form.
  3. The customer enters their payment information and can typically approve saving the card on file for recurring payments or a future purchase.
  4. The customer may get a unique code to complete the purchase.

The customer may also get another verification text from the payment processing company to confirm their intent to buy. As stated above, the exact process may vary by company, but you can expect a similar procedure to complete the sale.

Mobile Carriers Vs. Payment Processors for Text Payments

Many people associate text message payments with charity donations (often the amount is added to their phone bill). What is lesser known is that phone carriers generally only allow organizations to accept donated amounts in $5 or $10 increments. By setting up these limits, phone carriers reduce their own risk from non-paying customers. While the phone carrier setup can work great for flash-giving campaigns and allow an organization to avoid paying some payment processing fees, it isn’t a viable solution for businesses.

Enter companies like Relay, Pagato, and Sonar. These companies, and those like them, support SMS payments by integrating their messaging services with secure, PCI-compliant payment processing.

What Do You Need to Accept SMS Payments?

To get started accepting SMS payments, you’ll need to choose the company with the services that fit your needs best. There are some differences between the ways companies like Relay, Pagato, and Sonar price their services. Let’s briefly take a look at each of these three examples.

Relay (formerly Rhombus):

Relay charges $50/month for 250 “tickets” which refers to completed conversations. With that, you also get 1000 free SMS texts. All plans include automated responses, unlimited contacts, customer segmentation, and other engagement tools. Don’t forget about the actual credit card processing fees, however! Relay integrates with Stripe, and you pay 2.9% + $0.30 per successful transaction. You can accept every major card at the same rate with Stripe processing. (If you aren’t familiar with Stripe, check out our Stripe Payments Review.)

SMS Payments Relay

Pagato:

Pagato integrates with Stripe, Braintree (read our review), and Quickbooks Payments (read our review). In addition to the payment processing fees of your merchant account, you’ll pay 1% per transaction with a minimum of $0.20 per transaction. With Pagato, you can accept payments through SMS and social media channels like Instagram and Facebook, too. You won’t have additional setup, monthly, or hidden fees.

SMS Payments Pagato

Sonar:

Sonar offers packages starting at $24.67/month and $0.025 per SMS message. You can send automated messages, track customer data, set up campaigns and even A/B test them as well. Sonar integrates with Stripe, and your payment processing fees are 2.9% + $0.30 per transaction.

SMS Sonar

These are examples of some lesser-known companies, but the more prominent players like Square and PayPal allow you to send a text with a link to pay individual customers, too. The Square Cash App and PayPal don’t have the muscle to do much beyond sending a link to pay, however. You can’t A/B test marketing campaigns for an offer that you send out with Square or PayPal, for instance.

Keep in mind that most of the SMS messaging platforms mentioned above offer a free trial period and a demo to learn more about the exact features. So don’t hesitate to ask a lot of questions to get the information you need. It’s also a good idea to meet with your team and discuss the benefits of each platform, and of course, determine if your sales team has the bandwidth to have multiple open text conversations with customers. Text can be a powerful way to connect to your customers, but it is definitely not suited for every business model.

Which Types of Businesses Benefit Most From SMS Payments?

mobile-card-payment-app-service

Without a doubt, there is value in using SMS messaging to build a marketing campaign and nurture those ongoing relationships with your customers. When you consider that the global average open rate on a text is more than 90%, it makes sense to start building your phone list and reaching out that way.

As far as what businesses benefit from adding SMS payments to the mix, consider this:

If your business model provides delivery, your revenue depends on recurring payments, or you target a “repeat” customer base, SMS payments can make a lot of business sense. However, you need to have the staff and time to support the nurturing of customers via text. Text conversations can be a bit longer than a phone call if there is a specific issue, so training your team on escalation procedures can help you both save time and money with SMS texts.

All this connection can be great, but not all customers are going to love texting or getting “salesy” texts from you. While SMS texting and payments can help your sales team if you use it the right way, some may find automated sales messages impersonal. Keep in mind who your customers are and what supports their journey with you when you set up your SMS services.

Another significant benefit to SMS payments is the secure and compliant payment processing services that you can integrate with, such as Stripe. Because you don’t transmit the credit card data or store it on your servers, you can significantly reduce your liability when it comes to fraud risks. Not to mention that your customer has a fast and easy way to pay you, and all of it happens from their phone!

Are SMS Payments Right For You?

Being able to take payments by text offers potential — as long as the benefits outweigh the costs. Features vary by company, so do compare service packages before making a decision. One company may find a lot of value in the extra capabilities to target and segment lists, while another may be more focused on cutting down telephone orders. What services you choose mainly depends on your business model. Because text messaging offers a clear path to your customers’ hands, it may be worth finding the right balance to connect, engage, and encourage your customers to pay by text, too.

If you are discovering what else is out there in payment processing, be sure to check out our resources here at Merchant Maverick. Our Merchant Account Comparison Chart is a great starting point for payment providers! 

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