FastUpFront

No one can say that the credit card industry isn’t resourceful. The Credit Card Accountability Responsibility and Disclosure Act, which was enacted in 2009, was meant to reshape consumer finance. The new legislation stipulates that card issuers must give customers more notice about interest-rate increases. It also restricts problematic billing practices, such as inactivity fees.

While some of these fees and practices may have been abolished, the credit card companies are quickly clamoring to establish new fees to replace the old ones and are seeking out any loophole they can fit themselves through.

And there is little wonder why…The Card Act is expected to wipe out some $390 million a year in fee revenue, according to David Robertson, the publisher of industry newsletter Nilson Report, and in July the Bank of America reported that it is expecting to write off up to $10 billion in the third quarter as a direct result of the new legislation.

 

The signs of the credit industry’s response ar popping up everywhere. Since the Card Act began to take effect, between July 2009 and March 2010, the industry’s median annual fee on bank credit cards leaped by 18% to $59. Annual fees at credit unions soared by a whopping 67% to $25. The median cash-advance and balance-transfer fees also rose by 33% during that time.

In some cases, banks are deftly circumventing the law by creating new products, called “professional cards” that are not covered by the Card Act.

In another example, the new legislation stipulates that late-payment fees can not be accrued on a Sunday or holiday due to the lack of mail delivery. Some creditors, however, claim that the clause does not apply to them since they accept payments seven days a week.

Finally, some banks have resorted to shortening the credit cycle, which according to the Card Act must be at least 21 days from the time that the statement was mailed and the payment comes due. Borrowers across the United States have registered complaints that their billing cycles have shrunk to less than the 21 day period.

What more lies in store for consumer credit card holders…only time will tell.

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Ever since Skype rolled out its Skype 4 and Skype SIP in 2009, numerous small businesses have been using the service in order to keep overhead costs to a minimum. In May of this year, Skype released it’s 5.0 beta version packed with several great features particularly appealing to small businesses, such as video conference calling for up to four participants and its new Skype Manager Tool, which allows business users to centrally manage their Skype accounts, create multiple accounts for employees, allocate Skype Credit, assign features, and finally get reporting on Skype usage and cost in real-time.

 

 

Here are a few tips on how to use Skype in your business:

• Take time to learn about all the features. Skype goes way beyond simple person-to-person calling. Aside from the features listed above, business users can also take advantage of screen sharing and file sharing.

 

• Know how to deal with Skype Scam. One downside to the program is the prevalence of email, IM, and telephone- based spam solicitations. Fortunately, there are several ways to stop spammers from getting to your business Skype account.

 

• Become familiar with Skype add-ons. There are literally hundreds of third-party apps can that greatly enhance the way Skype is used within your business, such as Pamela which supports a software-based answering machine, automatic answer to chat messages, scheduling, and the ability to record Skype calls and upload them to the web.

Cost-cutting needs have produced the latest trend: spouse-run businesses. According to the Kauffman Foundation, 8% of new small businesses in the U.S. are co-owned by husbands and wives.

 

Both marriage and business co-ownership are relationships with potential for conflict. How can a couple successfully work together without compromising their marriage?

Here are some of the possible pitfalls of this arrangement, together with suggestions for managing the work/marriage relationship:

• Avoid merging business with home life. Spending all your time with your business partner can tempt you to discuss the business at all times. That’s a surefire way to obliterate your marital bond. Instead, be careful not to allow the two worlds to overlap, and leave the business talk where it belongs- at the office.

 

• Keep roles both within the business and without well defined. If both spouses throw themselves into the business with no regard for task distribution, both will burn out. It’s important to figure out which skills each spouse brings to the table, and to divide the work accordingly. The same is true for marriage

 

• Healthy and effective communication is key. Spouses who used to have separate work lives suddenly see each others’ work styles up close. Learning to critique each others’ work performance can be intimidating. To minimize discomfort, both partners should agree on a system by which they can effectively and safely tell each other suggestions for improvement.

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All predictions indicate that the economic recovery from the 2007-2009 US recession in will remain sluggish well into the next year. (No crystals balls needed.)

According to the latest quarterly AP Economy Survey, economists are not very optimistic when it comes to the economic rebound. As opposed to earlier predictions, now they typically use words like “weak growth” and “higher unemployment,” words that were taboo a mere few months ago.

 

Nevertheless, of the 42 economists who took part in the survey, most expressed their conviction (as of yet anyway) that America’s economic recovery is on track and predicted that a “double-dip” recession can be avoided.

According to the findings of the AP survey, economic growth for this year and the beginning of 2011 will not exceed 3%. Unemployment levels are not expected to fall below the current 9.5%. Many of the economists believe that normal 5% level of unemployment is at least four years down the road.

AP’s economic experts are not alone when it comes to bleak predictions. According to a Fed survey published in July, the economy is not springing back. Chairman Ben Bernanke is reportedly considering new steps to invigorate the economy. Interest rates are expected to be held at record lows for a longer period.

In response to the general slowdown, state and local governments have cut their spending in the first three months of this year at a rate of 3.8%. These kinds of actions cause the average American to spend less as well. According to James O’Sullivan, global chief economist at MF Global, there is always the risk that the lack of momentum will snowball and feed upon itself. Usually it’s the consumers who lead a rebound in this kind of situation, but consumer confidence has not shown signs of recovery.

The lethal combination of unemployment, practically non-existent raises and the real estate slump has left US consumers saving more and spending less. And this is not likely to change in the foreseeable future. Following the pattern of a vicious cycle, low consumer spending causes weak growth, which in turn keeps unemployment high.

But, despite all this, not everything is gloom and doom: 55% of the interviewed economists stated that the recovery as “on track” as of the middle of the year. It’s just that the train is awfully slow.

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All the hype aside, Apple products are cool. Those sleek electronics with even sleeker features have suddenly become an indication of those who are with it and *sigh* those who are just not.

 

 

But would you use your Apple computer to run your business? Though the majority of small business owners tend to shy away from All Things Apple within the office, that could soon be changing. According to a recent report in the Wall Street Journal, Apple Inc, the consumer electronics mega company behind the iPhone and iPad has begun to target the small business market.

According to Apple employees, the new plan calls for a more targeted approach to small business customers within Apple’s retail stores. This means more in-store technical support and “hand-holding” tactics directed at small business accounts.

Apple’s first move in this direction: the company has already begun hiring dedicated store-based engineers and salespeople. Additionally, some of its newer retail stores contain conference rooms where sales staff can meet with business owners.

Traditionally, the small business market has been dominated by the likes of Hewlett-Packard and Dell. Now, Apple seems to be eyeing a portion of the small business market, and that move could prove lucrative. Small businesses spend $310.8 billion annually on information technology.

How successful the company will be is as of yet unclear. It may be difficult to win over all those users who have gotten used to the Windows status quo- even if it isn’t the best of products. But with some marketing savvy, awash with contagious hype that only Apple can do, the company may actually break into the small business market. Then, not only will Apple products be cool; they’ll be effective business tools.

One of the positive fallouts of the recent economic crisis has been the insurgence of entrepreneurism among those who would have otherwise worked for others. Along side this trend has been the emergence of a new phenomenon called “co-working.” For those who are unfamiliar with the term, co-working refers to an arrangement where budding entrepreneurs and current small business owners share a common workplace in exchange for a monthly fee.

 

 

What are the benefits of co-working for entrepreneurs? According to co-working small businessmen, the advantages are many. Here are several benefits to consider:

 

• Save on overhead expenses. Co-working members pay a monthly membership fee and work in a communal office space. The deal includes the work space as well as all the equipment required to run a business- from wireless Internet and faxes, to conference rooms. Savings on rent and other overhead costs are significant.

 

• Collaboration and partnerships. Many small business owners are forced to spend a lot of time on areas in their business that may not be their expertise, such as web site development or marketing. The co-working community is often based on the principle of barter. So, for example, an accountant may cooperate with marketers who are able to promote his services, while the former will handle the marketer’s accounts. This kind of interaction provides fertile ground for partnerships and greater chances of success for all the parties involved.

 

• Mutual feedback. Bouncing ideas off other people and brainstorming are highly effective ways to develop in new directions. Even if only part of the community is active in your particular field, you still stand to benefit and you can pick up new ideas and areas for development. You can even create a unique business agreement in which each party chooses to deal with a different side of a particular business.

 

• Business/Home Separation – Many businessmen who work from their home find that the business encroaches on their private lives. Often, no line is drawn between business life and home life. By joining a co-working community you can get your private life back and put your work where it belongs – at the office.

 

Co-working communities are rapidly gaining in popularity mainly due to the empowerment they offer each individual member. At a time of financial uncertainty, few businesses can afford to turn their backs on this kind of stability.

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For the majority of U.S small businesses – the backbone of the nation’s economy – growth and expansion have remained on the back burner as of late. In fact, many smaller companies are struggling just to stay afloat even as reports stream in that the economy seems to be on the mend. Why? Here are a few reasons:

 

 

1. US Consumer Sentiment has plummeted once again. Consumers remain cautious about spending money. According to Thomson Reuters/University of Michigan’s Surveys of Consumers, U.S. consumer sentiment fell in early July to its lowest level in 11 months. This dramatic reversal comes after consumer sentiment climbed to its strongest level in nearly 2-1/2 years in June. All of this spells uncertainty for the majority of small businesses, and uncertainty breeds caution.

2. Banks have clamped down on small business loans. Banks are making risk reduction a priority at a time when a significant population of small businesses are struggling to be credit worthy. In a recent speech, Federal Reserve chairman Ben Bernanke called on community banks to lend more to small businesses because they are “crucial to America’s recovery.”In response, various banks noted that most small business owners are applying for funding just to remain afloat, never mind expansion. Moreover, even those who do seek to expand are struggling to come up with the collateral necessary to back up a loan due to the freefall in real estate prices.

3. Many small business owners are still trying to reduce debt levels. Many small business owners have accumulated bad mortgage or credit card debts and are still working at reducing their debt levels. The result: plans for expansion are put on the shelf.

4. Uncertainty regarding policies and legislation. Although during the past year, the Obama administration has pushed through a package of financial incentives to small business owners looking to expand or grow, these have since expired, and no decision has been reached regarding their renewal. There is talk in Washington about an overall incentive package for small businesses, but so far that is all it is – talk. And as we all know, you can’t take talk to the bank.

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According to a recent Federal Reserve report on small business credit card usage, though small business financing remains sluggish in the areas of business loans and business lines of credit, small business credit cards are fast becoming a popular, short-term financing option. Isn’t this a bit of deja-vu?

 

When the government stimulus program dried up in June, the biggest banks quickly responded by refusing to provide small business loans. Instead, they have been pushing credit card accounts on small businesses, claiming that credit card loans are the best thing since sliced bread. Has no one learned anything from the economic crisis?

In 2009, about a fifth of small businesses attempted to obtain a new credit card. Among those small businesses applying for cards in 2009, 80% stated that their most recent request was for a business credit card. In the end, about three-fourths of all applicants were approved for a card. On the other hand, the success rates for small businesses applying for lines of credit or bank loans in 2009 were about one-third and one-half, respectively.

Since credit card terms can change in an instant and lines of credit can disappear overnight, it’s clear that the banks that stand to make a hefty profit from the return to plastic. Credit card loans can be disposed of easily by the banks but place far greater pressure on business owners than standard bank business loans.

Nevertheless, with business financing so hard to come by (even those pesky SBA loans were notoriously hard to obtain), business credit cards used along with alternative methods of financing may be the only way businesses can secure the capital they need in this brave new recessionary world.

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As the unemployment rate continues to hover around 9.5%, leaving consumer income depleted, many industries have been suffering. But not every industry has been hit hard by the recession. The truth is that for numerous companies business is booming as a direct result of the high unemployment rate.

What are these industries, and why are they flourishing? Here’s a rundown:

1. Healthcare. Stressed-out people with no money or insurance to take care of themselves are prone to illness. Regardless of financial status, they still need healthcare.

 

2. Marriage and Family Counseling. Job loss and financial insecurity create wellsprings of conflict. Unhappy folk are turning to therapists to help them deal with the changes in their lives.

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3. Career Counseling. Many who have suddenly lost their jobs or who are just entering the job search pool are being forced to reconsider their career paths. Career counselors provide aptitude testing and advice.

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4. Training Seminars. Those seeking new employment opportunities need fresh education and training to prepare to work in alternate fields.

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5. Online Content Sites. Penny pinchers are thrilled to pick up free information, especially when it helps them save valauable time and money.

 

6. Debt Management Companies. People who are steeped in debt are turning to financial consultants and debt management companies to help them get their obligations under control and establish responsible spending habits.

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7. Temporary Staffing and Freelance Workers. Cash-strapped businesses can save a significant amount of capital by hiring temporary or freelance workers and independant consultants.

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8. Payday Loan Lenders.  Payday loan businesses offer small, short-term loans at high interest rates. People with poor credit and little cash often have few alternatives to cover living expenses.

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9. Debt Collectors and Repossession Agents. As income decreases, unpaid bills increase. Lenders need the services of those who will help  them recoup their cash.

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10. Fast Food Restaurants. Business for fast food establishments, such as McDonald’s, been booming as consumers look for cheaper alternatives when eating out.

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12. “Sin” Vendors. Vendors of alcohol, cigarettes, and candy, as well as gambling venues, offer a quick and affordable mood boost to people who are down in the dumps about the economy. Gambling also presents a chance to make some quick money.

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13. Second-Hand Buyers/Sellers. Unemployed customers who would have scoffed at buying second-hand a few years ago, now recognize the value of used goods.

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