Paying with credit cards is handy, especially in the modern world. Whipping out a credit card can also come with other perks — like points for purchases — and these bits of plastic can help smooth out a business’ cash flow. Unfortunately, many suppliers and merchants don’t take credit cards for bill payments, potentially causing you and your business unnecessary headaches.
That’s where Plastiq comes in. This service allows you to make payments that would otherwise require checks or bank transfers with a credit card. All told, this can help simplify your accounting while letting you take advantage of the benefits a credit card provides. There is a catch, however; Plastiq charges a 2.5% fee on each payment, meaning that this service may or may not work for your bottom line.
Is Plastiq right for your business? Keep on scrolling to find the answer.
What Is Plastiq?
Plastiq was founded in Boston in 2012 to help users pay bills with credit cards. While the company first aimed its sights on consumers, it has since pivoted towards focusing on helping small businesses use credit cards to pay off bills that might otherwise be difficult to pay.
“At first we thought consumers were the most likely to use Plastiq to pay off bills, but over time we saw that many of our customers were entrepreneurs and business owners, and changed our focus,” Plastiq’s chief operating officer Sameer Gulati told PaymentsSource in April 2020.
Plastiq, now based in San Francisco, has a simple service: If you want to pay a bill or invoice that usually would require you to initiate a bank transfer or write a check, you can pay Plastiq with a credit card instead. Plastiq will then directly pay the merchant or supplier to whom you owe money. Plastiq charges a flat fee of 2.5% of the payment amount for making the payment on your behalf. If you use a debit card, the fee drops to 1%; payments made to Canadian recipients incur a 2.85% fee.
You’ll be able to choose from three methods by which Plastiq can pay your bill:
Paper Check: Plastiq will cut a paper check and mail it to the recipient.
ACH Bank Transfer: Plastiq will deposit funds directly into the recipient’s bank account.
Wire Transfer: Plastiq can wire funds to both domestic and international recipients.
Plastiq can be used for a range of bills, from rent to payroll to taxes. It cannot be used for paying off commercial mortgages or other types of business loans. You can also set up automatic, timed payments or pay bills manually.
Those comfortable with mobile banking should note that Plastiq does not offer apps for Android or iOS at the time of writing. If you prefer handling financials on your phone, a lack of a mobile app may make Plastiq more difficult to use.
How Plastiq Can Help Small Businesses
The most obvious way Plastiq can help your small business is by optimizing cash flow. For most bills, you’ll need cash on hand in order to make the payment. With Plastiq, you’ll be able to put those payments on your credit card. This means you won’t have to pay for bills until your credit card’s due date. On top of that, if you sign up for a 0% introductory APR credit card alongside putting payments on Plastiq, you’ll even be able to carry a balance on your card for several months without needing to worry about paying interest.
Using Plastiq can simplify your business’ accounting as well. Instead of having to deal with multiple ways of paying your suppliers, you’ll simply need to pay Plastiq. Depending on your situation, this relief might be worth the 2.5% fee Plastiq charges.
In some cases, Plastiq can also be used to earn credit card points or trigger welcome offers. Note that Plastiq won’t be cost-effective for general point-earning unless your rewards rate is higher than 2.5% of your purchases. If you are merely trying to spend enough to hit a welcome offer’s minimum spending threshold, however, using Plastiq for purchases you would be paying for anyway could be a worthwhile tactic.
How To Use Plastiq For Business Expenses
Plastiq is a simple service that’s easy to use. Here’s a step-by-step guide to getting your business started with Plastiq:
1. Sign Up For A Free Account
To sign up for Plastiq, all you need to do is head over to the service’s sign-up page. Account creation is free — there’s no upfront charge to using Plastiq. To create an account, you’ll need to enter your name, phone number, who you’ll be making payments for (yourself, your business, or both), and your monthly expenses. If you select that you’ll be making payments for your company, you’ll also be asked your business’s name, industry, and zip code.
2. Add Credit Cards
Once you’ve created your account and are brought to the Plastiq dashboard, you can start adding your credit cards. Plastiq makes this part easy too — you’ll simply need to click on the “Add your first Card” box near the top of the screen and then fill out the relevant info.
While you can add as many credit cards as you like, we recommend that you only enter the cards you know you’ll be using with Plastiq. Doing so will limit the opportunities fraudsters have to steal your credit card information.
3. Make Payments
After you’ve added a credit card to your Plastiq account, you’ll be able to make payments. Just like the above two steps, there’s not much of a hassle here. You’ll just need to click “Add a Recipient” and then enter the recipient’s name and country, how you’d like Plastiq to pay the recipient (paper check, ACH bank transfer, or wire transfer), and the recipient’s address, phone number, and services provided. Before you make your first payment to a recipient, Plastiq will verify the information you entered by contacting the recipient. Once you’ve made that first payment to a recipient, you can set up recurring payments as well as manually make additional payments.
Plastiq will charge your credit card the cost of the transaction plus the 2.5% fee (or 2.85% if paying to Canada, or 1% if using a debit card). Plastiq then sends the payment to the recipient using your preferred method — all without the recipient needing to sign up for a Plastiq account.
Is Plastiq Right For Your Small Business?
Plastiq will fit a very specific niche of business, while most won’t find much worth in the service. If you like hunting down credit card welcome offers, Plastiq may offer a boon by allowing you to put more money towards your minimum spend amount. Businesses that struggle with consistent cash flow may also find value in Plastiq. However, most shouldn’t feel the need to plunk down the 2.5% fee Plastiq asks. Plus, your credit card may include a hefty interest rate — potentially minimizing the effect Plastiq might have on a business’ cash flow.
Give Plastiq a try ifâ¦
Your business has cash flow problems
You need to simplify your bill-paying process
You’re wanting to hit the minimum spend requirement for a credit card welcome offer
Skip Plastiq ifâ¦
You can’t afford Plastiq’s 2.5% fee
Your credit card has a high interest rate
You won’t benefit from paying bills with a credit card
Final Thoughts On Plastiq For Businesses
Plastiq can be beneficial for businesses needing a simple cash flow solution or for those wanting to maximize their credit card welcome offers. However, the service’s 2.5% fee should mean the most businesses will want to use Plastiq sparingly.
Wanting more options that can help your business’ cash flow? Check out our guide to improving cash flow. We also have an in-depth look at the best cash flow loans. If you’re curious about credit card welcome offers for small businesses, visit Merchant Maverick’s article on the topic.
The post Plastiq For Business: Could Plastiq Could Help Your Small Business Manage Expenses & Improve Cash Flow? appeared first on Merchant Maverick.
In some ways, the future is already here — at least in the world of credit card technology. Contactless payment enables you to simply tap your credit card to the payment terminal instead of swiping your card or sticking its chip into a reader. Because contactless credit cards reduce the touching of shared surfaces, such a payment method is both faster and — importantly, in the face of the COVID-19 pandemic — cleaner.
Especially in a world now dealing with the terrors of the pandemic, contactless payments are becoming popular. According to an April 2020 survey run by Mastercard, 79% of cardholders worldwide say they are currently using contactless payments, with safety and cleanliness being cited as important factors. Companies are buying into contactless payments, too.
“Contactless offers consumers a safer, cleaner way to pay, speed at checkout, and more control over physical proximity at this critical time,” said the Head of Mastercard Acceptance Solutions, Blake Rosenthal, in response to the above-mentioned Mastercard survey.
Curious to learn if your business’ credit card is contactless-enabled? Want to know which issuers offer contactless credit cards? Then keep reading for the deets!
How To Check If Your Credit Card Is Contactless-Enabled
If you’ve received a credit card sometime in 2019 or later, then you’ve got a good chance that it’s contactless-enabled. Even if you have an older card, you still might have a bit of plastic that can be used just by tapping on the payment terminal.
To determine if your card can be used for tap-to-pay, just look for a four-bar wave-like symbol. You may notice that this wave symbol is similar in appearance to the Wi-Fi logo. The contactless symbol can usually be found somewhere on the back of your credit card.
Here’s an example of what the symbol looks like on the back of a credit card (to the left of the Visa logo):
If your card doesn’t have this symbol, it probably isn’t contactless-enabled. Should this be the case for you, you’ll need to reach out to your issuer to request a contactless card. We’ve outlined methods for requesting contactless cards from popular issuers in the next section.
Note that not all merchants are set up to receive contactless credit cards. You’ll need to look for the wave symbol on the payment terminal when out shopping before you attempt to tap your card. If a payment terminal doesn’t have the symbol, you’ll need to swipe or insert the card to pay instead.
Once you’ve confirmed that you have a contactless-enabled card and the merchant you’re shopping at accepts contactless payments, simply hold your card up to the payment terminal. You just need to wait for a second or two for payment confirmation — which is usually displayed via either a beep or check-mark on the terminal screen — and then you’re good to go!
Issuers With Contactless Business Credit Cards
A number of issuers offer contactless credit cards — in fact, nine of the top 10 US issuers are actively handing out contactless cards to customers as of April 2020, according to Visa. Here’s a look at a few of the bigger issuers that offer contactless cards and how you can get set up with one:
American Express
American Express began dabbling in the contactless card game way back in 2012, making the company a fairly early adopter. All of American Express’s small business credit cards are contactless-enabled as of July 2019. The Amex business card portfolio includes these products:
Blue Business Cash
Blue Business Plus
Business Gold Card
Business Green Card
Business Platinum Card
Business Plum Card
If you apply for any of the above cards and are approved, Amex will ship you a contactless version of the card.
If you currently have an Amex card that isn’t contactless-enabled, the issuer states that it will “send you a new contactless-enabled Card on your next renewal date.” You’ll also receive a contactless card if your current one becomes lost or stolen.
Should you desire a contactless card before your next renewal date, Amex suggests visiting its website or the Amex Mobile app to request a new card that is contactless-enabled.
Bank of America
Bank of America started its contactless card push in June 2019 by issuing cards to customers in select pilot cities (specifically New York, Boston, and San Francisco). The bank has yet to formally announce a wider rollout of contactless cards.
There also isn’t an official method for requesting a contactless card from Bank of America. As such, unless you live in one of the three aforementioned cities, you may find getting a Bank of America contactless card difficult.
Capital One
Capital One’s foray into contactless cards kicked off in 2017 with the launch of the technology in the Quicksilver Cash, Venture Rewards, and VentureOne Rewards cards. While the bank does promote contactless cards as a faster way to pay, there are no details about which current Capital One products do or don’t offer contactless options.
If you find yourself with a Capital One credit card that isn’t contactless-enabled, we recommend calling the number on the back of your card to find out if replacing the card is an option. If you are in the market for a Capital One card, try reaching out to customer service to find out if the credit card you’re interested in offers contactless options.
Chase
In November 2018, Chase announced plans to roll out contactless cards across its product lineup. In the time that has followed, numerous Chase-issued credit cards have received a contactless facelift — over 20 of the company’s cards now include the feature.
Chase maintains a list of all its contactless cards on its website. Its stable of contactless business cards includes:
Ink Business Unlimited
Ink Business Preferred
Ink Business Cash
United Business Card
If you want to replace a Chase credit card in your wallet that isn’t contactless-enabled, visit Chase’s card replacement page.
Citi
Citi’s history with tap-to-pay cards started with the Costco Anywhere Visa Card receiving contactless technology in 2016. Since then, the bank has rolled the feature out to other cards within its brand. Citi currently offers two business-specific credit cards:
Note that while the AAdvantage card is confirmed to have contactless technology, Citi doesn’t market the Costco Business card as having it. However, the nearly-identical consumer cousin of the Costco card does support contactless payments, so it is likely safe to assume the business version does as well (although your mileage may ultimately vary).
If you have a Citi-issued credit card without contactless technology support, we suggest that you dial the number on the back of your card. Once you reach customer service, ask if you can have the card replaced with a contactless-enabled version.
Other Tap-To-Pay Options
If your current credit card isn’t contactless-enabled, you may still be able to take advantage of contactless technology when checking out. Both Android and iOS have their own solutions utilizing NFC for mobile phone users. Let’s take a look at what they are:
Apple Pay
Apple introduced Apple Pay in 2014. This service allows you to attach an eligible credit card to the Wallet App on your iPhone. Once set up, you’ll be able to pay for purchases using your iPhone or Apple Watch at merchants who accept contactless payments.
For more information on Apple Pay, including how to set it up with your credit card, visit Apple’s website.
Google Pay
To combat Apple Pay, Google released Android Pay in 2015 and then later rebranded the service as Google Pay in 2018. Similar to Apple Pay, you can add an eligible credit card to the Google Pay app on your compatible Android phone. Once you’re all squared away, you can use your NFC-equipped phone (or compatible smartwatch) to place payments at the checkout counter of merchants who are set up for contactless payments.
For a deeper diver on Google Pay, visit Google’s website.
Stay Safe While Paying For Business Expenses
Contactless cards offer a simple and safe way to pay for purchases during the coronavirus pandemic. By ensuring that your wallet contains contactless-enabled credit cards, you’ll help keep both yourself and others at less risk throughout this turbulent time. Plus, you may find that paying with just a tap is both easier and faster than more traditional methods.
The post Time To Get A Contactless Business Credit Card? Hereâs How To Get Your Own Tap-To-Pay Card appeared first on Merchant Maverick.
Venture capital is often touted as the be-all-end-all when it comes to financing a startup. To be fair, you have to admit that wealthy investors showing up to rain treasure upon you because you have a great idea has a lot of appeal. That being said, venture capital isn’t the only way to finance your new business and, in many cases, may not even be the best way to go.
So where do you turn when venture capital isn’t a good match for your business plan? Below, we’ll look at some alternative funding sources if venture capital isn’t the right fit for your startup or small business. But first, let’s talk about venture capital a bit to make sure we’re on the same page.
How Venture Capital Works
There are a lot of myths surrounding venture capital, but the concept is fairly simple and not especially glamorous in practice. Venture capital firms aggregate funds from a number of sources ranging from bored wealthy folks to pension funds. Once they’ve raised an agreed-upon amount, they’ll shop around for businesses in which to invest. What each of these funding sources has in common is the desire to recoup their money, plus a tidy profit, when the business they invested in either A) goes public or B) is sold to another company. A venture capital fund frequently disburses its funding over the course of several “rounds,” the first of which is called the seed round.
Investing in unproven businesses, many of which will fail, is risky. Typically, venture capitalists will hedge their bets by spreading their money out through a number of businesses to increase their chances of scoring a hit. This model works mainly because the payoff from a successful company making an initial public offering (IPO) can generate returns orders of magnitude above what was invested. On average, a venture capital firm is looking for somewhere around a 20% return per year.
How much the firm receives is based on a valuationof the company done both before and after the cash infusion. The difference in valuation is used to determine the percentage of stock the venture capitalists will own in the company. It may also determine the amount of influence the investors have in a company’s decision-making processes prior to the company’s IPO/sale.
When You Should Look For Alternatives To Venture Capital
If you looked at the previous section and thought that arrangement sounds bad, then venture capital probably isn’t for you. For example, if you’re not a serial entrepreneur and would prefer to own and run your business indefinitely, this probably isn’t the funding source for you. Venture capitalists expect you to have an exit strategy.
It’s also quite possible that your type of business won’t fit in well with the venture capitalist model. For better or worse, “venture capital” has become almost synonymous with Silicon Valley. If you’re not a tech company creating some kind of software, you may have some difficulty convincing a fund to work with you. They’ll also be looking for a quick return, so if your business plan doesn’t match that rate of return, you’ll be a poor match.
Keep in mind, too, that most venture capital funds specialize in a particular type of business, so even if your profile is venture capital friendly, you may have to look around to find one that can work with your company at its current stage.
Finally, there’s a geographic component to venture capital investment culture. If you’re not in, or close to, hot spots like New York City, San Francisco, Los Angeles, Atlanta, or Austin, you’ll have to work much harder to wiggle your way into a venture capitalist’s view.
8 Venture Capital Alternatives
If all new businesses needed to rely on venture capital to get off the ground, we wouldn’t have very many businesses. The good news is there are numerous ways to finance your company’s early operations that don’t involve venture capital. Let’s take a look at some of your options.
1) Grants
When you’re talking about raising money, even a zero-interest loan just can’t compete with free money. Grants typically offer small-to-moderate-sized lump sums to companies that fit their criteria, and the best part is you don’t ever have to pay that money back!
So why isn’t every startup running exclusively off grants? Well, as you can imagine when you’re handing out money, there’s going to be a lot of people in line to get some. Grants are highly competitive. Applying for them can be quite involved and time-consuming, and there’s no guarantee that your hard work will pay off. Still, if you target the right grants at the right time, you can score a nice chunk of cash with no debt obligations.
2) Crowdfunding
You’ve probably heard of Kickstarter, but the crowdfunding industry is quite a bit larger and more specialized than you might think. In contrast to venture capital, traditional crowdfunding tends to work best when you’re trying to raise money for a tangible, deliverable product–funders are essentially pre-purchasing your product (with some additional funders simply donating smaller amounts of money in the interest of seeing your project succeed).
A newer form of crowdfunding, equity-based crowdfunding, allows investors to purchase equity in your company. These services can be convenient if you’re not plugged into the investor circuit but are still looking for that kind of relationship. Just be aware that this is still a fairly new realm of investing, with many investors still wary.
Keep in mind, any kind of crowdfunding will require a marketing blitz to get your name and product out there, which will likely have its own costs in both time and money.
3) SBA Loans
The Small Business Administration’s loan guarantee programs are designed to give small businesses access to quality rates and terms. In the case of startups, the two most popular programs, 7(a) and 504, may not be the best fit as they usually require you to have been in business for two or more years.
The SBA microloan program, on the other hand, is more geared toward startups. These loans can net you between $500 and $50,000. Interest rates range from around 6% to 18%, with most borrowers falling somewhere between 8% and 13%. You’ll have a while to pay it off too, with term lengths of up to 6 years. The rate you get will depend upon your credit score and any collateral you’re able to put up.
If you need more than that, you’ll also want to check out SBA Community Advantage Loans, which the agency offers through community-based lenders. These loans range from $50K to $250K, with terms lengths of up to 10 years. Interest rates are lower, usually falling between 7% – 9%.
4) Online Business Loans
Wait, why would you be here reading this if you could just go out and get a business loan? Fair point. It can be very challenging for startups to qualify for business loans since most business lenders are going to want to see a profitable business history before they open up their purses.
That said, it’s not impossible. Many online lenders are willing to work with businesses with histories as short as three months. Some of the more creative ones may not care at all. Just be prepared to pay interest rates in proportion to the risk your business represents. Additionally, you can often find better terms if you can put up something valuable as collateral.
5) CDFI Loans
Community Development Financial Institutions (CDFIs) come in a number of different forms, ranging from banks, to credit unions, to–believe it or not–venture capitalists. What they have in common is certification by the federal CDFI Fund, which designates them as being committed to facilitating economic growth within low-income or historically disadvantaged areas.
CDFIs usually carry higher interest rates than comparable bank products, but lower than those of a typical alternative lender. Best of all, many are startup-friendly.
6) Personal Loans
Your business may not have much history, but that doesn’t mean you don’t. Many personal loans are versatile enough that they can be used for business expenses. And since you’re probably not looking at borrowing vast amounts of money, they may be sufficient to meet your financing needs.
Of course, because they are personal loans, you’ll lose whatever protections you would have had with business loans, which typically differentiate between you and your business. Make sure you can still pay them off even if your business fails.
7) Vendor Financing
Don’t feel bad if you haven’t heard of vendor financing until now. Vendor financing is an arrangement where a vendor essentially lends a seller the money to buy the vendor’s products. This can be useful if you’re launching a retail business of some kind or even badly need what they’re selling for your own uses.
So what do the vendors get out of the arrangement? Believe it or not, it can be better to move product with risk than not move product at all. Additionally, the vendor will usually expect to earn interest on the loan or an equity stake in your company in return. No matter the arrangement, you’ll probably need to be on good terms with the vendor to be a candidate.
8) Friends & Family
Depending on your social context, this may or may not be a practical option for you. Still, you may be surprised by how willing your friends and family may be to pitch in and help you succeed and probably at far lower (if any) interest rates than even the most benign lender.
Just use your judgment and don’t burn bridges.
Your Best VC Alternative Offers Funding That Works With Your Terms
Don’t worry about fitting the platonic ideal of an entrepreneur. The best venture capital alternative for your startup will depend greatly on your circumstances and business plan. Work with the resources and connections you have to find the funding you need to carry out your vision.
Look for more startup-related information?
Get The Equipment You Need For Your Startup Business With A Loan Or Lease
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As the COVID-19 pandemic continues its attack across the globe, the financial world has experienced a brutal setback. Small businesses have been particularly affected in this downturn; roughly 70% of owners had applied for Paycheck Protection Program loans by April 9, according to the NFIB Research Center.
With such danger looming overhead, credit card issuers have begun to reign in customers’ spending limits. These decisions can cause headaches for business owners who rely on credit cards: Besides dropping the amount of usable credit available, a lower credit limit can impact all-important credit scores.
Have you been hit by a lower credit limit recently? Or are you concerned about having your card’s credit line decreased in the future? Continue reading to find out how you can help manage your situation and keep your business financially healthy.
Why Issuers Are Lowering Credit Limits & Why It Matters
As mentioned above, several card issuers are known to have tightened credit limits in recent days. The Wall Street Journal specifically attached Citi, Discover, and Synchrony as issuers that have lowered spending limits due to concern over “millions” of credit card customers being unable to pay their bills.
Synchrony Bank is one of the few issuers to publicly comment on lower credit limits, stating that it has been using internal and credit bureau data to “dynamically reevaluate” its customers’ creditworthiness. Discover has also revealed that it is decreasing limits for new customers but added that it isn’t dropping spending limits for current customers directly due to COVID-19. There are also reports that Chase has recently tightened limits for current customers, although the bank hasn’t officially commented on the situation. It’s possible that other issuers have done the same as the above banks or are planning similar tactics for the future.
Such decisions aren’t unprecedented, even if the times we live in are. At the start of the 2008 recession, roughly 20% of banks dropped credit line limits for credit cards of prime borrowers, according to a senior loan officer survey by the Federal Reserve. Sixty percent of subprime borrowers, meanwhile, saw their credit limits tightened during the same time.
Issuers cut down credit limits for a very simple reason: They want to lessen their risk. With the current financial instability swirling around the world, more and more accounts will miss payments and potentially even default. Such situations could wind up being costly for issuers, and lower spending limits can minimize any potential damage.
For you, a lower credit limit on your card can be detrimental to your credit score — a metric that issuers and lenders use to determine how trustworthy of a borrower you might be. You’ll want to have a higher credit score because it can affect your business’ ability to qualify for loans, credit cards, and other sources of credit.
A key component to having a healthy credit score is maintaining alowcredit utilization rate, something that can impact up to 30% of your score. Credit utilization is calculated by taking the amount of credit you’re using and dividing it by the amount of credit you have access to. When an issuer lowers the limit on a credit card you have, your credit utilization will, of course, rise — potentially decreasing your credit score.
Credit limit decreases to your card can also happen stealthily. While most credit card changes require 45-days’ notice, no such restriction is in place for credit line changes. That means you’ll need to stay on your toes and take note of any changes to your card’s credit limit.
With all this said, plenty of issuers are working with customers impacted by the pandemic. In fact, some have stated that credit line increases might be a potential solution if you are struggling financially due to the coronavirus.
What You Can Do To Protect Your Financials & Credit Score
If you do find yourself with a suddenly lower credit line on your credit card, there are a few avenues you can take to minimize the damage to your financial health. We’ll take a peek at several of your options below:
Talk To Your Issuer
The quickest fix could be simply to reach out to your issuer and ask them to reconsider your new credit limit. Not all issuers will be happy to reverse a recent change, though. Still, setting out for a credit line negotiation is worth a shot. In some cases, you may also learn that your credit line decrease was due to other reasons not directly related to the financial downturn, such as a change in spending habits or a previously missed payment.
However, do note that with the current pandemic crisis, many issuers’ customer service lines are experiencing high call volumes. In some situations, this means that you may wind up being on hold for an hour or even longer.
It’s also worth a try talking to issuers of other cards you might have. While you might have seen a drop in available credit on one card, a different issuer might consider you due for a credit line increase. Plus, many issuers, such as American Express and Chase, offer the ability to request increases through their online portals. Asking for an increase online can save you the time spent and headache of calling customer service.
Check Your Credit Score Regularly
Something worth getting into the habit of doing even if your credit line hasn’t decreased is checking your credit score frequently. By monitoring your credit score regularly, you’ll be able to grasp where your overall credit health stands.
Luckily, there are a few websites that offer free credit score services. Here are some of Merchant Maverick’s favorites:
Credit Karma
Discover Credit Scoreboard
WalletHub
For a more in-depth look at free credit score-checking websites, read our guide.
As another note, each of the three major credit bureaus (Equifax, Experian, and TransUnion) are now allowing every American to check their credit report once per week for free. Previously, individuals were only allowed to look up free credit reports once per year from each bureau.
While these reports don’t display credit scores, checking them often can give you an overview of what lenders and issuers are looking at when you ask to borrow money. On top of that, regular peeks at your credit report can help stop problems before they get out of hand.
Apply For Another Credit Card
A possible remedy to a lower credit line is simply to increase your overall amount of credit available. You can do this by applying for a new credit card. If you get approved, your new card’s limit will be added to your overall amount of credit available, potentially offsetting the dip from one of your current cards.
Keep in mind, though, that you’ll want to make sure you get a new card that makes financial sense for your business. Some cards carry costly annual fees that won’t be worth your time, while others offer rewards that won’t suit your spending habits. Of course, there are plenty of worthwhile cards out there, such as those that dole out cash back or those with limited balance transfer fees.
You’ll also want to practice proper credit card habits. That means you’ll only want to spend what you can afford, keep your balance to a minimum (unless you find a great 0% APR credit card), and make your payments on time. Just because you have a new credit card doesn’t mean you have free cash at your disposal. Instead, consider the new card as a way to keep your credit healthy during this period of financial instability.
Pay Off Your Balance Consistently
One of the most obvious ways to keep your credit utilization low is to only make purchases you know you’ll pay off. This way, you’ll be able to keep the amount of debt you owe to a minimum.
Unfortunately, in these turbulent times, you may find your business struggling to pay off your credit card bill. Or perhaps your business lacks a cash flow right now and needs to buy on credit to carry a balance. If these situations match your business’s profile, only make necessary purchases on your credit card. Your credit utilization rate will thank you down the line.
All told, dealing with a lower credit limit on your card is a frustrating endeavor. By taking the above steps, you may be able to protect your credit score — potentially benefiting your business into the future.
The post Was Your Credit Card Limit Lowered Due To COVID-19? How To Minimize The Damage To Your Financials & Credit appeared first on Merchant Maverick.
Travel-focused cards are some of the best credit card options for small businesses. These plastic bits come with invaluable perks, such as travel credits, Global Entry/TSA PreCheck application fee waivers, and airport lounge access. Plus, many feature tantalizing welcome offers and unique rewards that help businesses save cash regularly.
Unfortunately, these premium cards often come with premium price tags — their annual fees can reach into the hundreds of dollars. And with travel becoming less of a routine for many businesses due to the COVID-19 pandemic, these cards’ perks and unique rewards just aren’t usable right now. As such, you may be wondering if it’s time to cancel your company’s premium travel card.
However, you should know some issuers are lending a helping hand by offering cardholders incentives for sticking around. Called “retention offers,” these special incentives are meant to stop cardholders from canceling their credit card. While retention offers are nothing new in the world of credit cards, they have become more popularly requested because of the current crisis.
Should you seek out a retention offer from your credit card issuer? Want to learn more about what retention offers are? Then keep reading for a primer on what retention offers are and how they can help your business.
Types Of Retention Offers For Small Businesses
Traditional retention offers have been around for a while, with protocols varying from issuer to issuer. We’re also seeing some types of offers become more popular in the face of the current coronavirus pandemic. Let’s take a look at how issuers might incentivize you to keep your card.
Bonus Points Or Statement Credits
The most common type of retention offer you’ll see is an issuer granting extra points or statement credits. In many cases, these types of offers are intended to help offset your annual fee. For example, you may receive a $100 statement credit to counteract your card’s $99 annual fee.
In some situations, these bonus points/credits are given without you needing to spend anything extra. However, it’s also possible that your issuer will require you to spend a certain amount within a set number of months before you pick up the extra rewards — similar to a welcome offer. So this means you might see an offer such as 3,000 bonus points after you spend $1,000 in three months.
Annual Fee Reduction
You may also be able to get your annual fee reduced (or even completely waived) if you call in and ask. This might wind up being a little better for you because you won’t have to worry about paying all or part of the annual fee before you get credits added to your account.
Occasionally, these reductions are made in the form of targeted statement credits. For example, Chase recently handed out a $100 annual fee credit to select users with the Sapphire Reserve card, which has a $550 annual fee. This credit helped soften the blow during the coronavirus pandemic and especially so because Chase had upped the Sapphire Reserve’s annual fee from $450 to $550 in January.
Extended Welcome Offer Windows
In the face of the current pandemic, issuers have been extending welcome offer windows for select users. A lot of premium travel cards come with meaty welcome offers. However, with the recent downturn, many aren’t using their cards as frequently — potentially harming a cardholder’s chance of hitting their welcome offer’s minimum spend requirement. By lengthening the time to meet this requirement, a card issuer gains goodwill with customers while also encouraging continued spending with eligible credit cards.
American Express was the first major issuer to announce such a change. Early in April, Amex allowed those who were approved for card accounts between the beginning of December 2019 and the end of May 2020 to receive an extra three months to trigger their minimum spend requirement.
Issuers We Know That Grant Retention Offers
A few card issuers have been pretty aggressive with providing retention offers on their premium credit cards. Below is a quick rundown of some examples you may get from popular issuers.
Note: The offers below are examples of temporary offers in response to the coronavirus pandemic and of more general retention offers. For a consistently updated and fresh list on how credit card issuers are providing aid during the coronavirus pandemic — both with temporary offers and otherwise — check out our article on credit card assistance. For more exhaustive lists on retention offers specifically, visit the FlyerTalk forum or MilesToMemories.
American Express
American Express has some of the best premium credit cards on the market. Its cards come with great rewards, but Amex also packs in some hefty annual fees — making the cards ripe for retention offers.
Amex has also been one of the most responsive issuers to the coronavirus. As noted earlier, the issuer has lengthened welcome offer windows for card accounts approved between the beginning of December and the end of May. If you qualify as one such user, you get an extra three months to spend the minimum amount for your welcome offer.
Additionally, cardholders enrolled in Amex’s Membership Rewards program are eligible to earn one extra point for purchases made via the Grubhub and Seamless delivery services. This bonus rate began in April and will run through the rest of 2020. You can add this offer to your eligible card through the Amex Offers portal.
Beyond its coronavirus response, American Express has been known to provide retention offers when cardholders call and ask. Example potential offers if you ring up Amex include:
The Business Platinum Card From American Express: $595 annual fee — 5,000 points immediately, plus 25,000 more after $10,000 spent in 90 days
American Express Business Gold Card: $295 annual fee — 5,000 points immediately, plus 5,000 more after $3,000 spent in three months
Capital One
While we haven’t seen instances of Capital One offering bonus points or statement credits, the Virginia-based bank has still been doling out new perks to encourage users to keep and continue using their cards during the pandemic.
All of Capital One’s first-party travel cardholders (so those with Venture, VentureOne, and the business-focused Spark Miles and Spark Miles Select) can now redeem their miles for delivery service and restaurant takeout purchases up through June 30. Capital One includes DoorDash, Postmates, and Uber Eats among the eligible delivery services. Both consumer travel cards can also have miles redeemed for streaming services (including Netflix, Hulu, Spotify, Disney+, and Kindle Unlimited), while the business bits of plastic can have miles cashed in for purchases from wireless phone service providers (including Verizon, AT&T, and T-Mobile).
Additionally, some cardholders have chimed in that Capital One is willing to extend welcome offer windows for business cards, according to MilesToMemories. Per one user who called Capital One, the bank is reportedly allowing until December 31 for them to hit the minimum spend requirement on their Spark business credit card. Note that this extension is not automatic — you’ll need to reach out to Capital One to see if you can get a similar deal.
Citi
Citi hasn’t made any widespread tweaks in response to the coronavirus pandemic. However, the bank is still known for dishing out retention offers on its premium credit cards. Here are a couple of example retention offers from Citi:
Citibusiness / AAdvantage Platinum Select Mastercard: $99 annual fee — $99 statement credit after $3,000 spent in three months
Citi Premier Card: $95 annual fee — $95 statement credit, plus 1,000 points after $1,000 spent monthly for three consecutive months
Chase
Between its first-party credit cards and those offered in conjunction with travel brands, Chase has a number of premium credit cards. With such a deep stable of cards, Chase has been fairly receptive to handing out retention offers in the past. The bank has also distributed several perks for those impacted by the coronavirus.
Most notably, Chase has extended welcome offer windows for those who signed up for a card between January 1 and March 31. If you qualify, you get an extra three months to reach your offer’s minimum spend requirement.
As mentioned earlier in this article, Chase also dished out a $100 annual fee credit to Sapphire Reserve cardholders who have a renewal date between April 1 and July 1. This credit effectively knocked the card’s $550 annual fee down to $450 (although the card previously had a $450 annual fee last year, so it basically winds up a wash for those who qualify).
For those stuck at home, Chase has additionally enabled 5x rewards (up to $500 spent) on delivery and takeout through DoorDash and Tock for Sapphire Reserve, Sapphire Preferred, Freedom, and Freedom Unlimited cardholders. This bonus rate runs through May 31.
Those above perks are automatic — no need to dial Chase if you qualify. You might still be able to find some savings if you call in, however. Other example retention offers you might see by contacting Chase include:
Southwest Rapid Rewards Premier Business Credit Card: $99 annual fee — $100 statement credit for keeping the card, no spending required
Marriott Bonvoy Boundless Credit Card: $95 annual fee — $50 or $100 statement credit for keeping the card, no spending required
How To Get A Retention Offer
As seen above, issuers have been announcing offers without cardholders needing to reach out. These temporary offers are intended to placate cardholders during the financial downturn that has occurred amid the health crisis. In most situations, if your issuer has announced some sort of perk due to the coronavirus pandemic (such as an extended welcome offer window or bonus points for certain categories), you won’t have to do anything proactively — the perks will be available automatically.
However, for most traditional retention offers, you’ll need to give your card issuer a call on the phone. While this may be more problematic than in the past — issuers are experiencing high call volumes in the pandemic’s wake — the best way to receive a retention offer is by reaching out.
When looking for a retention offer targeted around your annual fee, give your issuer a call via the number on the back of your credit card. Note that you’ll want to do this after your card’s annual fee is posted to your account but before your monthly payment’s due date.
Here’s a couple of tips to help you with your request:
Come Up With A Game Plan Before You Call: As is the case with most customer service calls, knowing what type of offer you want as well as crafting a script in your head can help immensely. You’ll also want to know what you’re willing to concede and how weak of an offer you’re prepared to take.
Make Your Request Short & Sweet: There’s no reason to beat around the bush. Simply stating what you’re looking for and how you’d like the card issuer to handle your situation should be enough. Retention offer requests are commonplace for most customer service agents, and any offers available to you will likely be auto-generated by the issuer’s computer system — coming with a detailed sob story probably won’t help much.
Know That You May Have To Cancel: Some issuers, such as Chase, have instituted new policies where the customer service agent won’t see a retention offer until after they’ve begun the cancellation process.
It’s also worth noting that the offer may depend on how much money you’ve spent on your credit card in the past months and years. Those who have used their card more frequently will have a better shot at actually receiving a retention offer as well as potentially earning a better offer than someone who might’ve spent less.
Good Luck!
Should you wind up without a retention offer — or an inadequate one — don’t hesitate to cancel your credit card if you can’t afford its annual fee. Especially with the financial woes facing numerous businesses right now, it’s just not worth throwing away money on a card you won’t be taking full advantage of for the next several months at least. However, hopefully, your issuer will provide some sort of solution. With the right offer, you may be able to keep hold of your card until it becomes valuable again in the future.
If your business is still struggling with its credit card due to the coronavirus pandemic, check out how else issuers are providing assistance. We’ve also written up a guide on how to best use your credit card throughout the financial downturn. For more general guides and resources to help your business during the current crisis, visit Merchant Maverick’s coronavirus hub.
The post Get Waived Fees Or Bonus Points With A Retention Offer For Your Small Business Credit Card appeared first on Merchant Maverick.
Are you passionate about education? Do you love working with students? Do you have a specialized skill that you want to pass on? If so, you might be a good candidate for establishing your own tutoring business.
Becoming a tutor allows you incredible job flexibility, while also giving you an opportunity to do meaningful work in your community. When you tutor, you make an impact on students’ lives and help guide them toward educational success. And at the same time, tutoring allows you to manage your own schedule and set your own rates. What’s more, when you set up an online tutor business, you can even work from home!
Have you been considering starting a tutoring business, but you aren’t sure where to start? In this article, we’ll walk you through a step-by-step process for planning your tutoring business. And, we’ll also give you some ideas for where you can turn for the funding you might need to get set up.
Ready? Let’s go!
Why Start An Online Tutoring Business?
Tutors start their own businesses for a number of reasons, but one of the primary reasons is the ability to be your own boss. When you operate an online tutoring business, you are able to set your own hours, determine your own hourly rates, and take on as many or as few clients as fit your schedule. The flexibility that comes with tutoring is one of its biggest advantages.
What’s more, becoming a tutor is an excellent way to support students and parents. When you step in as a tutor, you help students learn the skills they need to succeed in the classroom, and you relieve some stress on parents. For many students, a tutor can change the outcome of their educational career. So if you have a heart for students, and a desire to see them grow and succeed, tutoring could be your passion.
In addition, over the past few years, online tutoring has been increasing in popularity. According to IBIS world, the market size of online tutoring services in the US (as measured by revenue) is expected to increase by 4.1% in 2020. There is always a need for educators, especially during the school year and around standardized testing time, and when you become a tutor you help fill that need. If you want to join a growing market, now is a great time to open our own online tutoring business!
When To Sign Up With A Tutoring Service Instead Of Starting Your Own Business
There are a couple of routes you can take to begin tutoring online. You can choose to sign up with an existing online tutoring network (such as Care.com), or you can start your own independent online tutoring business. Your choice between these two options depends on your available resources, your timeline, and your intentions for your business.
In general, you should sign up with an existing tutoring network if the following applies to you:
You Have A Limited Social Network: If you don’t already have a number of potential students in mind, it might be best to join a tutoring website. These sites help connect tutors with students, which can reduce some of the demand that comes with building an entire client base from scratch.
You Need To Start Working Immediately: Finding clients and establishing a presence in the tutoring market can take significant time, energy, and money. If you want to skip over this process, signing up with a tutoring site is a great option. You’ll be able to find clients and get teaching much sooner.
You Don’t Mind Paying A Fee: Most tutoring sites charge tutors a percentage of their earnings. You should have room in the budget for this expense in order for a tutoring site to be an advantage.
You Don’t Want To Set Up The Technical Tools On Your Own: In order to successfully tutor across the internet, you need access to a variety of tools. At minimum, you need a video conferencing tool, a way to share your computer screen, and a virtual whiteboard. Many tutoring sites that specialize in online tutoring (such as Varsity Tutors) offer these tools built into their platforms.
Here are a few tutoring sites you might consider: Chegg Tutors, Care.com, VIPKid, and Varsity Tutors.
Alternatively, you should consider building your own business if:
You Already Have Potential Students: If you have a wide social network full of school-age children and college students, you may not need any help building a client base.
You Want To Keep All Your Earnings: This is a huge factor. If you resent the amount that tutoring sites charge for their services, you should build your own business. You’ll have to cover other expenses, but you get to decide how much those other expenses cost.
You Have The Time To Get Set Up: As I mentioned above, building your own business takes time. Make sure you have the time (and available income) to build your business before you begin.
Before You Start Your Tutoring Business: Essential Prereqs
As you might imagine, education is a major requirement for starting your own tutoring business. In general, most tutors need to have earned at least a high school diploma or a GED. This is especially true if you are signing up with an online tutoring site.
The level of education you have earned plays an important role in determining what content areas you can teach. Here are the grade levels and subjects you can tutor with each level of education:
High School Diploma Or GED: At this education level, you are able to tutor elementary and middle school students. You are also able to tutor high school students, although you may need to demonstrate your knowledge in other ways (using transcripts or standardized test scores to demonstrate content area knowledge).
Undergraduate Degree: With a Bachelor’s degree, you are able to tutor elementary, middle school, and high school students. You are also able to tutor college students in your area of specialization. This is especially true if you have work experience post-college that relates to your specialization.
Post-Graduate Education: You can tutor elementary, middle school, high school, and college students. Depending on your area of specialization (if you have a degree in education or in teaching English for Speakers of Other Languages), you might also consider teaching adults who are finishing their GED or who are looking for a way to develop their English fluency.
As you look into tutoring, you should also consider working towards a Tutoring Certification. These certifications require you to go through a few hours of training, pass a background check, and submit a couple of letters of recommendation. Earning a Tutoring Certification enhances your credibility, and it also demonstrates to parents that you are safe around their students. Many tutors also benefit from the training included in earning a Tutoring Certification. These certifications are available from the National Tutoring Association and the American Tutoring Association. Depending on the certification, you may have to pay for training, membership fees, a background check, and application fees. These expenses total around $200-$250 for certification, but I think this expense is worth it for the amount of credibility you gain.
Finally, in order to begin tutoring, you need to identify your area of specialization. Think about where you can add value, and consider the experience that you have under your belt. Is there a particular grade level or content area that you are skilled in? As you look for your specialization, consider the subject areas in which tutors are in high demand: English, Math, Science, Test Prep, and Study Skills. And remember, each of these subjects can be broken down into sub-categories like Algebra, Chemistry, reading comprehension, SAT and ACT preparation, etc. Once you have identified one or two specializations, you’re ready for the next step.
8 Steps To Starting Your Own Tutoring Business Online
Step 1: Make A Business Plan
Strong businesses start with a strong plan. A business plan is a written description of your planned business and business strategy. It’s your vision of how your business will be organized, how it will operate, and how it will be profitable. You can find lots of information online about writing a business plan. Your local chamber of commerce and government economic development agencies likely also have resources you can use.
A typical business plan includes:
Executive Summary
Company Description
Market Overview
Sales & Marketing Strategy
Operating Plan
Organizations & Management Team
Financials
Once you have a basic idea of how your business will operate, it’s time to calculate your starting costs. Do you need to purchase materials or teaching aids? Will you be paying for website building software or a web host? Do you need to purchase any hardware or software, or perhaps buy business insurance?
Since your business is just getting started (and since you will probably be the only employee for a while), your business plan does not have to be incredibly in-depth. Mostly, you should use this plan as an opportunity to set goals, create your marketing strategy, and predict your business expenses.
Step 2: Perfect Your Computer Setup
Your next step is to set up your classroom. Find a place in your home to conduct your online tutoring. You should look for a location that’s away from the noise of the house and has plenty of light. Then, position yourself so that there is a clean, neutral background behind you in video calls.
You should also make sure that you have all of the technology you need to begin online tutoring. You, of course, need a computer and a strong internet connection. You should also have a webcam and a functional microphone (even if it’s just the microphone built into your laptop). In addition, we recommend purchasing a tablet or digital drawing pad and stylus that you can use with a virtual whiteboard software. These tools make it easier for you to illustrate and share concepts with your students from a distance.
Step 3: Find The Right Tutoring Software
Once you have your hardware figured out, you should select your software. You should consider purchasing the following types of software:
Video Calling Software: Find a video calling software like Zoom or Google Hangouts that allows you to schedule meetings in advance and then send meeting links to your attendees via email. You should also look for the ability to share your screen as you will likely want to use this tool to make demonstrations in your tutoring.
Virtual Whiteboard Software: Virtual whiteboard software allows you to draw, write, and diagram on a digital whiteboard. All you need to use the software is a mouse, but using a tablet or a digital drawing pad and stylus (like Wacom Intuos) gives you even better control. A few virtual whiteboards you should check out include Ziteboard, Â IDroo, and Scribblar.
Document Sharing Software: Consider using the free tools that Google provides to your advantage. Google Docs is an excellent tool for sharing documents, editing simultaneously, and making comments on specific pieces of a document. Google Classroom further expands these tools. Using Google Classroom, you can create a central hub of information for your students. Here, you can add resources, assignments, and rubrics. You can use quiz features to help students assess their learning. Google Classroom stores students’ work indefinitely, making it a great way to keep track of student progress over time.
Step 4: Set Your Rates
As your own boss, you get to decide on the rate you charge for your services. Rates vary dramatically from tutor to tutor, and they typically depend upon your education level, the subject area that you teach, and your students’ specific learning needs.
Typically, tutoring rates fall somewhere between $20–$80 an hour.
Tutors who charge the highest rates are those who teach in-demand subjects that require significant experience and familiarity, like SAT prep, and high school and college-level math and science. Tutors who have training and experience working with students with special education needs also typically charge higher rates.
Unfortunately, hourly rates tend to drop when you tutor online instead of in-person. This is primarily because tutors are not limited by location, which makes the online tutoring market much larger with more available tutors. On the other hand, when you tutor online, you eliminate any expenses related to travel and you don’t have to rent out a space for tutoring.
I’ve seen information that suggests that the average rate for online tutoring is $20–$30 an hour, although you can certainly charge more based on your education level and experience.
As you think through your pricing rates, you should look into the rates that other tutors in your content area charge. Then, you should take into account your anticipated business expenses (pricing for any required software, self-employment taxes, and the time you spend preparing for each tutoring session). Using this information, you can set your own pricing range.
Step 5: Register Your Business
In many cases, registering your business is technically optional.
Tutors who decide to operate as a sole proprietorship or partnership do not need to do anything to register their business. Essentially, the business is an extension of its owner. Sole proprietorships are easy to set up, and typically in a sole proprietorship, taxes are simpler than they are with other forms of incorporation. In a sole proprietorship, when you go to file taxes, you file your business taxes and personal taxes together. You will have to pay self-employment taxes on your earnings. In addition, sole proprietorships do not come with the liability protection that is part of many other types of business structures. You are personally liable for any debts your business takes on.
Other forms of incorporation require more time to set up and come with their own advantages and disadvantages. Here are the most popular ways to incorporate:
Limited Liability Corporations (LLCs): Aside from setting up a sole proprietorship, many tutors find that establishing an LLC is their next best option. LLCs offer limited liability protection for their owners, and they are not as complex as a corporation. Each state has its own rules for what it takes to start an LLC, and you don’t necessarily have to register your LLC in the state where you’re doing business (although you generally should). Like with a sole proprietorship, LLC owners report their business earnings and losses on their personal taxes.
C-Corp:Â In a C-corp, shareholders are considered the owners of the company, and they receive limited liability protection. However, at the same time, business decisions are made by corporate officers who may or may not be shareholders. In a C-corp, taxed are filed separately from personal taxes, and shareholders pay income tax on dividends. In order to form a C-corp, you have to file articles of incorporation with your state.
S-Corp:Â S-corps are very similar to C-corps, but with a few additional restrictions: You have to have fewer than 100 shareholders, and they have to all be U.S. citizens or residents. Profits and losses are reported on personal taxes. Finally, in addition to filing your articles of incorporation, you also have to file IRS Form 2553.
Even if you decide to operate your tutoring business as a sole proprietorship, we suggest setting up a plan for separating your business finances from your personal finances. The easiest way to keep your finances separate is to create separate business checking and savings accounts. These additional accounts make it easier to track your profits and losses, and they can save you a ton of headaches when it’s time to pay your taxes.
You should also consider filing a DBA (Doing Business As), Trademark, or Entity Name for your business. Filing a business name allows you to operate your business under its own name, instead of your legal name (Math Works as opposed to Sandy Davis, for example).
Step 6: Establish A Web Presence
As an online tutor, it’s crucial that you have a strong online presence. There are a few ways you can go about building your web presence:
Create A Website: It never hurts to have a sleek, attractive website. Developing your own website adds credibility to your business and can help build hype for your services. Luckily there are user-friendly and cost-effective website builder tools that you can use to set up a site in a matter of days. Some of these tools (such as Wix) even provide appointment scheduling tools that you can use to allow your clients to book–and pay for–their tutoring sessions online.
Set Up Social Media: Set up business accounts on the social media sites that your clients use most frequently (Facebook and Instagram are good places to start). Make sure you include important information like your subject areas and a link to your website. You should also encourage reviews on your Facebook page, so parents and students can leave testimonials, improving your credibility.
Create A Yelp Page: If your business doesn’t already have a Yelp page, now is a good time to set one up. Adding a page on Yelp encourages more clients to leave reviews, and it can help direct new potential clients to your services.
Check out these top website builders:
Service
Pricing
Hosted or Licensed
Templates & Themes
Compatible Credit Card Processors
Next Steps
$14 – $179/month
Hosted
Excellent
Many
Go to Site
Free – $29.90/month
Web-Hosted
Excellent
Many
Go to Site
Free – $25/month
Web-Hosted
Average
Many
Go to Site
$0/month
Hosted
Good
Square Payments
Go to Site
Step 7: Choose A Payment Processing Solution
In order to accept payments online, you’ll have to integrate with a payment processing solution.
Payment solutions fall into two categories: Payments Service Providers (PSPs) and merchant accounts. PSPs are typically easier and faster to set up, but they are also known for having account stability issues. Many PSPs accept merchants almost immediately, and then upon review decide that certain merchants are too high-risk to use their platform and freeze their accounts. Merchant accounts, on the other hand, take longer to set up because there is an initial review process. This makes merchant accounts more stable (you are less likely to have your service revoked). Merchant accounts also allow you to negotiate the rates that you pay for payment processing. In order to process online payments with a merchant account, you need to find a payment gateway, which is an integration that allows you to connect your website and your merchant account.
Here are a few payment processing solutions that might work for you:
Payment Service Providers: PayPal is one of the most widely accepted PSPs out there, and it is a familiar payment option for your clients. Another good PSP is Square. In fact, Square includes appointment scheduling features, so your clients can schedule sessions and pay for services at the same time.
Built-In Payment Processors: Some website builders come with their own in-house payment solutions. One of these options is Wix Payments for Wix users. Built-in payment solutions are great options for quickly setting up a payment method.
Merchant Accounts: Although merchant accounts often take longer to set up, for some merchants the initial investment is well worth it. We particularly like Fattmerchant and Payment Depot.
Step 8: Market Your Business
Once you have your website and payment method set up, it’s time to start marketing your tutoring business! Your marketing strategy should take into account your current network and your intended audience. Here are a few methods you can try:
Email Marketing: If you already have a large personal network, make sure to notify them of your new business. Use email marketing software like Constant Contact or Mailchimp to reach out to family and friends with information about your tutoring services.
Social Media Marketing: Use your personal and business social media accounts to announce your business. One great way of gaining new clients with social media is to put out free content that anyone can view or download. Upload or link your favorite learning resources, and create a few videos to show how you prepare for a tutoring session. Sharing these resources and videos demonstrates your personality and teaching style. It can help build your reputation and make you appear more approachable.
Post In-Person Flyers: Place fliers with tear-off tags on bulletin boards in libraries, churches, schools, gyms, and daycare centers. Think about where parents of school-age children might be, and get your fliers out there! Be sure to always check with management before posting your fliers, of course.
Offer Free Consultations: Consider giving new potential clients an opportunity to meet with you for a free initial consultation. It’s a good idea to include parents in this initial conversation.
Share Customer Testimonials: Ask happy clients for a positive customer review, and then use that testimonial to your advantage. Word-of-mouth goes a long way. Make use of it in any way you can.
How To Fund Your New Online Tutoring Business
New businesses often find themselves in need of capital. If you’re facing startup costs and wondering how to address them, here are a few options:
Personal Savings
If you have some liquid assets saved up, now might be a good time to use them. By using the money you’ve already saved, you eliminate the risk associated with debt and you ensure you won’t be losing additional money on interest. That said, you take a risk by using your personal money to finance your business. If your business fails, you lose that money.
Credit Cards
One of the easier–and riskier–ways to fund your startup expenses is with personal or business credit cards. Credit cards allow you to access credit quickly and apply it to many different types of purchases.
You should keep in mind, however, that credit cards charge high-interest rates on any balances you carry from month to month. This makes credit cards a good option for purchases you can pay off quickly, and a potential problem for ones that you can’t.
Note: Avoid taking out cash advances on your cards unless absolutely necessary. They come at a very high cost.
Personal Loans
Although traditional business loans are not an option for some new businesses, you can often use a personal loan to cover some of your startup expenses. These loans can be easier to get when you’re first starting out.
The downside of a personal loan is that you don’t get the liability protection you’d have if you applied as a business. You may also be more limited in terms of the amount of money you can take out. Still, if you need a little money to get started, it’s not a bad option.
Grants
Grants might be the closest thing to “free money” we have in the real world. Grants are often highly competitive, and they require businesses to complete a fairly involved application process. As you consider your options, you should factor in the amount of time you spend applying for a grant. And, you should take into account the likelihood that you will not be selected for that grant.
If you need some advice on where to look for grants, check out our feature on the topic.
ROBS
ROBS stands for Rollovers as Business Startups, and they are extremely niche products for entrepreneurs with retirement accounts like 401(k)s.
For a fee, a ROBS provider allows you to use money from your retirement account to pay for startup costs without incurring any tax penalties for accessing retirement funds early. Like with personal savings, with ROBS, you are risking your own money. ROBS is probably overkill for most new tutoring businesses, but it is a good option to keep in mind.
Go Out & Start Your Online Tutoring Business
Does tutoring from the comfort of your own home sound like your dream job? Tutoring can be one of the most rewarding and profitable small businesses to start. And with minimal start-up costs and very few steps to getting started, you can get begin tutoring in very little time!
That said, as with all new business ventures, you should approach your online tutoring business with a strategic mindset. Take your time, decide on a niche, gather all the tools you need, and work towards building a positive reputation in your social network. Now is a great time to enter the tutoring market. So get out there, and get teaching!
What’s Next
Your complete guide to business structures
Learn about unsecured business lines of credit
Check out this guide for starting a consulting business
Learn how to start an Amazon business
Check out this guide to starting a pet sitting business
The post How To Start An Online Tutoring Business: Prerequisites & 8 Steps To Success appeared first on Merchant Maverick.
Business owners looking for funding sources are likely to converge on two options: business credit cards and business loans/lines of credit. In this article, we’re going to be comparing these two common sources of business financing and letting you know the circumstances that call for utilizing them.
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If you’ve arrived at this post because your business has been affected by the COVID-19 pandemic, we’ve got resources on business lending for you. Check out our full Coronovirus hub for small businesses, but start by reading What SBA Disaster Loans Are & How To Qualify For One and Small Business Loan Resources & Guides for Businesses Affected By The Coronavirus.
Credit Cards VS Business Loans: A Quick Comparison
There are some fairly obvious differences between business credit cards and business loans (total funding amount, revolving line of credit vs. a one-time lump sum of cash, etc) as well as some less obvious ones. Let’s examine the situations that call for using a business credit card vs. applying for a business loan or line of credit.
When To Use A Business Card
Let’s list the circumstances that favor the use of a business credit card over a business loan.
1) You Need Financing For Common Ongoing Expenses
Given the fact that a) you can usually get funding more quickly with a business credit card and b) the funding you can access via a business credit card is significantly less than what you can access with a loan, a business credit card is a better way to get working capital for everyday business expenses.
Because a credit card provides you with a revolving line of credit, you won’t be borrowing more than you need — and you won’t be paying interest on money you don’t need.
2) You Want To Pay 0% Interest (for a while)
Many business credit card issuers offer an introductory 0% APR period with their credit cards. The 0% APR period typically lasts 9-12 months, but you can find offers that extend this period to 18-21 months in certain instances.
This is especially useful for business owners who intend to make some significant purchases in the short term. Credit cards offering a significant 0% APR period can end up saving you lots of money on interest payments.
3) You Want To Build Up Your Business Credit
One helpful feature of just about every business credit card is the fact that they report your card activity to the three major business credit bureaus (Dun & Bradstreet, Equifax Small Business, and Experian Business). If you make your payments in a timely manner and maintain best practices with your credit utilization ratio — that is, the amount of credit you’re currently using divided by the total amount of credit you have available — using a business credit card can help build up your business credit.
Of course, there’s a flip side to this. If you don’t make a payment as required — or if you utilize a greater proportion of your credit than the credit bureaus like (less than 30% is generally considered good) — use of a business credit card can actually hurt your business credit, so be careful and don’t spend more than you can afford to pay down.
4) You Want To Earn Rewards/Cash Back For Your Spending
Most business credit cards are designed to have you earn rewards or cash back when you use the card to make purchases. You may even be able to find a card that targets its highest reward-earning at the purchase categories your business uses most.
If you’ve decided to get a business credit card, pay particular attention to the rewards scheme offered by the card issuer. This way, you can get the card that gives you the most value back in the form of reward points or cash back.
We’ve compiled a list of the best rewards credit cards for small businesses.
5) You Want Help Tracking Your Business Expenses
With most business credit cards, you’ll get a monthly billing statement that details your transactions for the month. Many of these cards also allow you to link to accounting software, giving you another way to track your business expenses in real-time.
When To Use A Small Business Loan
Now, let’s get into the circumstances that call for the use of a business loan or line of credit.
1) You Want To Finance A Large Expense (Up To $2 Million)
While credit cards are useful for financing smaller purchases, if you want to finance expenses worth up to $2 million (you can even get up to $5 million with an SBA loan, though those are difficult to qualify for), you’ll want to apply for a small business loan.
A loan will likely be needed if you’re looking to expand your business in a significant way.
2) You Want To Minimize Your Interest Payments On The Money You Borrow
When comparing business loans to business credit cards, it’s important to note that, all else being equal, you can get a lower interest rate with a loan or line of credit than you can with a business credit card.
With an online lender, a business with a good credit score and healthy business metrics can get a loan with an APR starting around 6% — or a line of credit with an APR around 8% — which is a significantly lower APR than what you’ll be offered with even the most basic business credit card.
3) You Want To Repay What You Borrow Over A Longer Stretch Of Time
Online lenders often offer loans with term lengths of up to 7 years. SBA loans can even carry term lengths of up to 25 years. Suffice to say, if you want to borrow a significant sum of money and you’re looking to spread out repayment over a significant length of time, a business loan is the way to go.
A Word Of Caution Regarding Business Loans
When comparing business loans with business credit cards, it’s important to note that requirements to qualify for a business loan are more stringent than the requirements to qualify for a business credit card. You’ll likely need to provide collateral, and for large loans, you might need to make a significant downpayment.
Another factor to consider: You can get funding more quickly with a business credit card than you can with a business loan/line of credit. You might be waiting a few weeks or longer for funding from a business lender. If you apply successfully for a business credit card, you should be able to get funded within a week.
That said, there are options for quick business loans if you apply online.
Which Is Right For Your Small Business?
In conclusion, when deciding between applying for a business credit card or a business loan to cover the cost of your business expenses, it’s important to consider your particular business situation and funding needs.
If you need more than $50K in funding and you have the ability to qualify for a loan — and are able to provide collateral and a downpayment — you should definitely start researching business lenders.
If you need less than $50K, you want to borrow money at 0% interest in the short term, or you want to earn rewards for your purchases on a continuous basis, you’ll want to apply for a business credit card. However, if you only need a small amount to keep you going and don’t want to mess with a credit card, there are options for $5,000 loans and $10,000 loans.
Next Steps
If A Credit Card Is The Right Choice For Your Business…
If you’ve decided to apply for a business credit card, here are some resources to help you in your search:
How To Get A Business Credit Card: The Step-By-Step Guide
The Best Business Credit Cards For 2020
Business Credit Cards For People With Bad Credit
If A Small Business Loan Is The Way To Go…
If a small business loan is what you need, check out the following links to help guide your search:
How To Get A Small Business Loan: The Step-By-Step Guide
Types Of Small Business Loans: 12 Types You Should Know
Best Small Business Loans For 2020: Our Top 10 Picks
Again, if you’ve arrived at this post because your business has been affected by the COVID-19 pandemic, we’ve got resources on business lending for you. Check out our full Coronovirus hub for small businesses, but start by reading What SBA Disaster Loans Are & How To Qualify For One.
The post Need Small Business Funding? When You Should Get A Business Credit Card VS A Small Business Loan appeared first on Merchant Maverick.
The global coronavirus pandemic and the resulting loss of consumer demand is placing unprecedented stress on small businesses that have had to either scale back or shut down completely. Other businesses in select industries may be experiencing the opposite: so much demand that they are struggling to meet it under emergency conditions. There’s no way to sugarcoat it: rough times are ahead, but don’t assume that means your business is doomed.
At the time of writing, the federal government is still shaping its response to the unfolding coronavirus pandemic and the accompanying economic fallout, so a lot of questions remain with regard to what kind of relief will eventually be available. In the meantime, there are some resources you can immediately tap that can either directly extend credit to you, or help guide you to it.
4 Small Business Organizations That Can Help You Get A Loan
The Small Business Administration (SBA)
In the best of times, the SBA serves as a loan guarantor, making it easier for small businesses to get approved for high-quality loans originated by other lenders. It will continue to do so during the COVID-19 crisis, but during times of disaster, the SBA offers some additional help.
The most notable program comes in the form of Economic Injury Disaster Loans. Unlike typical SBA loans, these loans are federally issued, offering low-interest cash-infusions to businesses within designated disaster zones. With regard to COVID-19 in particular, this includes states whose governors have requested aid under the Coronavirus Preparedness and Response Supplemental Appropriations Act. At the time of writing this includes:
California
Connecticut
Delaware
Washington, DC
Florida
Georgia
Indiana
Maine
Massachusetts
Montana
Nevada
New Hampshire
New Jersey
New Mexico
North Carolina
Rhode Island
Utah
Washington
Note that even if your state isn’t on that list, certain counties within your state may still be eligible.
Economic Injury Disaster Loans provide up to $2 million in funds to affected businesses and can be used to pay debts, accounts payable, and other bills that can’t be paid due to disaster conditions. The loans carry a 3.75% interest rate for small businesses and a 2.75% interest rate for non-profits.
Community Development Financial Institutions
Many CDFIs, such as credit unions, offer low-interest loans and other types of financial assistance during natural disasters. These programs tend to be dependent on federal funding, so keep an eye on stimulus relief bills being proposed at the federal level. If you aren’t sure what your local ones are, you can download a list of certified CDFIs through the U.S Department of Treasury site.
Once you’ve found your local CDFI(s), check their websites to see what kinds of programs they offer. In addition to the aforementioned loans, many will offer advice and consultation to businesses undergoing disaster conditions.
SCORE
SCORE is the largest network of business advisors in the U.S. During normal times they offer mentoring, webinars, courses on demand, and a library of online resources. The good news is that most of these things can still happen during a quarantine and, with the exception of in-person events, they still are.
While they can’t directly get money into your hands, they can advise you on the best course to get money as quickly as possible. If you’re feeling lost about what to do and you’re stuck at home, SCORE is a great resource you can tap without stepping foot outside. They’re currently producing a lot of coronavirus-related content on their website and updating frequently, so park your browser there for new developments as the crisis unfolds.
Internal Revenue Service
So, okay, you’re probably not going to get a loan from the IRS, but you may have suddenly found yourself with a lot less money to meet your tax obligations. Luckily, it looks like they’ll be cutting you a break:
Following President Donald J. Trumpâs emergency declaration pursuant to the Stafford Act, the U.S. Treasury Department and Internal Revenue Service (IRS) today issued guidance allowing all individual and other non-corporate tax filers to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest. The guidance also allows corporate taxpayers a similar deferment of up to $10 million of federal income tax payments that would be due on April 15, 2020, until July 15, 2020, without penalties or interest. This guidance does not change the April 15 filing deadline.
I’d recommend checking in with the IRS site’s coronavirus page from time to time in order to keep up with developments. They also provide links to other resources that may be of use to you.
What To Do If You Need Fast Funding
On the other hand, if you’re a business that is experiencing higher-than-normal demand during the COVID-19 crisis, you may be dealing with a different kind of problem. Perhaps you need to get ahead of your inventory or purchase equipment to deal with the increased stress on your business. In that case, you can probably take a more mundane route to get funding
While there will no doubt be instability in the lending market for the foreseeable future, lenders are often some of the first institutions to receive federal relief in times like these. Appetite for risk will vary by the lender, but some will likely be looking for borrowers who seem like a safe investment. Note, I’d strongly caution businesses that have had to cut back or temporarily shut down operations against seeking high-interest financial products at this time; the expense can easily balloon out of control if you’re not able to keep up with payments. Debt collectors are the last thing you want to add to your plate right now.
If you need a loan quickly, I’d recommend taking a look at our top-ranked small business lenders for 2020. Bear in mind that some may or may not be lending as normal at this time.
A simpler option for short-term financing, particularly right now, may be a business credit card. While the interest rates on credit cards can be extremely punishing, if you pay off your balance each month you’re effectively getting a “free” extremely short-term loan. This can be useful for smoothing out your cash flow and making direct purchases. Many also come with lucrative rewards programs that can allow you, if you play your cards right, to actually save money by using a business credit card. Check out our guide to getting a quality business credit card fast for more info. And read about How To Use (& And Avoid Using) Business Credit During The Coronavirus Pandemic.
If you’re falling behind on credit card payments right now due to diminished business from the pandemic, our guide about how you can get help from credit card issuers might be useful.
Learn About Small Business Loans From Our Resources
Finally, we have a lot of content on this site that deals with how to find and apply for loans under various circumstances. Much of it will still be relevant during the COVID-19 crisis (and you can expect us to continue updating and adding to it as circumstances change and various federal relief packages start to come online).
If you’ve never had to apply for a business loan before, we can walk you through the process of where to look and how to apply. Given the volatility of the moment, you probably also want to take stock of whether or not you can afford a small business loan. We can also help you figure out how strong your business loan application is.
And be sure to check back in with us in the following weeks as we try to bring you the best, most current information about how your small business can weather the storm.
Merchant Maverick is currently offering a hub of resources and information for small business owners during the coronavirus pandemic. Learn about taking your business online or accepting payments online going forward, figure out how your restaurant can survive the pandemic, read some tips from our remote team about working from home with kids.
The post Small Business Loan Resources & Guides For Businesses Affected By The Coronavirus appeared first on Merchant Maverick.
Just like any point in recent history, credit cards are and will continue to be a useful tool for businesses — even though we have the COVID-19 coronavirus looming over our heads. However, credit cards can also still be costly and harmful when used wrong. Plus, many businesses are seeing financial struggles in the pandemic’s fallout. As such, it’s crucial for you to understand how to use credit cards smartly for your business.
That’s why we’ve written this guide — find out below how you can use credit cards to help your business weather the storm created by the coronavirus pandemic.
Utilize Mobile Apps
With social distancing recommended for the general public, going into physical banks to discuss your credit card may not be the best option. Even though you may not be a high-risk candidate for the coronavirus, the disease can still spread asymptomatically, meaning that it is in everyone’s best interests to limit in-person contact as much as possible.
As such, you’ll want to take advantage of other tools provided by your card issuer. While many issuers have customer service available over the phone, customers have been experiencing longer-than-usual wait times — sometimes up to three hours. With this in mind, managing your credit card account via an app or online may be your best bet. A number of the major credit card issuers offer Android and iOS apps for account management:
American Express
Bank of America
Capital One
Chase
Citi
Discover
U.S. Bank
Look Into 0% APR Credit Cards
Some credit cards offer 0% interest (also known as “APR” in the credit card world) for the first few months after you sign up for the card. If you apply and are approved for such a card, you’ll be able to carry a balance for several months without worrying about paying interest. That could be helpful if the coronavirus is impacting your current cash flow — but you believe you’ll start picking up more business in a few months.
Here are a few of our favorite business credit cards with 0% APR introductory periods:
American Express Blue Business Plus: 0% APR on purchases and balance transfers for your first 12 months
Chase Ink Business Unlimited: 0% APR on purchases for your first 12 months
Capital One Spark Cash Select: 0% APR on purchases for your first nine months
Which of the above cards works best for your business may come down to each card’s rewards scheme. Amex’s Blue Business Plus nets two points per dollar on the first $50,000 spent each year (and one point per dollar thereafter). For both Chase’s Ink Business Unlimited and Capital One’s Spark Cash Select, you’ll receive a simple and unlimited 1.5% cash back across all purchases.
For a more in-depth look at 0% intro rate credit cards, check out Merchant Maverick’s article.
Consider Requesting A Credit Line Increase
If you find yourself bumping up close to your credit card’s credit limit because of extra charges and cash flow problems due to the coronavirus, you may be able to request that your line be increased. Increasing your credit line will enable you to put more charges on your balance as well as potentially lower your credit utilization ratio (essentially the amount of debt you owe versus the amount of your credit limit).
Some issuers, such as Citi, have actively advised customers that credit line increases are an option during the pandemic crisis. For many issuers, you can request a credit line increase without calling or speaking to someone in person. Instead, apps and websites can process credit line increase requests — saving you time and limiting the strain on customer service lines.
A word of warning, however. Just because you receive a credit line increase doesn’t mean you should then go and max out your credit card. Doing so can negatively impact your credit utilization ratio — a statistic that plays a role in your credit score. Instead, make sure you still exercise smart spending habits and only spend extra when absolutely necessary.
Explain Your Struggles To Your Issuer
At this time, many credit card issuers are focused on working with customers impacted financially by the coronavirus. By contacting your issuer and explaining the problems you might be having with paying your bill, you may be able to receive some sort of relief.
Some issuers, such as American Express, have been granting cardholders interest-free periods, bonus points, and more. Others, such as the Apple Card (issued in conjunction by Apple and Goldman Sachs), have allowed customers to skip a payment period without incurring interest or late fees.
Merchant Maverick has previously detailed what a number of different issuers are doing to help financially-strapped customers during the coronavirus’s impact.
Keep Making Payments
If your issuer won’t extend payment deadlines, and you are unable to pay your credit card bill in full, making sure you at least make the minimum payment due is still helpful. When making the minimum payment, you will be charged interest on your remaining balance. However, you will also avoid costly late fees — as well as potentially harming your credit score.
Use Your Card Responsibly
If your business has no cash reserves, it may be enticing to start overloading your credit cards with expenses. However, putting charges on your card today that you won’t be able to pay off in a month, six months, or even a year could put you in a world of hurt.
Besides potentially being hit with late fees and interest on unpaid charges, failing to pay your bill on time can damage your credit. Having a healthy credit history could be important down the line — your credit can affect your ability to apply for loans and credit cards as well as impact your insurance rates and more.
Consider Other Financing Options
So instead of maxing out your business’s credit cards, turning to a different financing source could work for your business. Some businesses may find success by applying for a line of credit. You may also find financial assistance with SBA disaster loans or emergency business loans.
Regardless of how you handle your credit card during this tumultuous time, know that you are not alone. Small businesses in these cities have started support groups to help their communities (you may be able to find something similar close to you):
Asheville, North Carolina
Louisville, Kentucky
Seattle, Oregon
We at Merchant Maverick have also been working to create helpful resources; you can find more of what we’ve written at our coronavirus hub. The CDC also has useful information on its website.
The post How To Use (& How To Avoid Using) Business Credit During The Coronavirus Pandemic appeared first on Merchant Maverick.
With the COVID-19 coronavirus pandemic spreading throughout the world, travel plans have been impacted for both personal and business travelers alike. For small businesses especially, canceled plans may cause expenses you just can’t afford right now.
If you’ve booked your business travel with a credit card that includes travel insurance, you may be wondering if you can cancel your plans and get some or all of your money back. Unfortunately, credit card travel insurance is often fraught with language that excludes trips canceled “due to fear of getting sick.” This means you may find it difficult to get a full reimbursement if you cancel a trip solely because you don’t want you or your employees exposed to the coronavirus.
However, many airlines are working with customers on flight changes and hotels are being more flexible with their cancellation policies. Most big airlines are waiving flight change fees up through the next month. This means that if you can reschedule your trip (or use your booking for a different trip planned further out), you may be able to avoid eating all the costs.
Let’s dive into the full nitty-gritty below.
Does Trip Interruption Insurance Cover COVID-19?
A number of credit cards offer travel cancellation and trip interruption insurance when you pay for travel with the card. However, whether these travel insurance plans cover the coronavirus is something you’ll have to discover on a case-by-case basis.
Many credit cards exclude epidemics and pandemics from travel insurance coverage. Additionally, you may be out-of-luck if travel providers (such as airlines or hotels) cancel your travel arrangements (be it flights, hotel rooms, or rental cars). Other potential exclusions include situations where a travel provider goes bankrupt and can no longer offer to offer the service you’ve booked. All told, the possibility of your return flight getting canceled or you getting sick probably isn’t enough to induce travel insurance to cover your costs.
However, some credit cards do cover situations where you have been medically advised not to travel, a family member has a life-threatening illness, or you are quarantined by a physician or the government. If you or a travel companion qualifies for one of these cases, you may be eligible to have your costs covered by your credit card’s travel insurance.
To determine whether or not your specific credit card will cover you right now, you should carefully peruse your card’s benefits document. You may still have a paper copy of your benefits that the issuer sent out after you were approved for the card. You can also often access the details of your card’s benefits on your issuer’s online portal.
Something worth noting is that signing up for additional travel insurance may not protect you any better than just plain old credit card insurance does. These more “traditional” travel insurance plans still might contain language that excludes coverage if you cancel over worries about getting sick — unless you sign-up for an expensive “cancel for any reason” plan.
Because providers of credit card insurance seem to be waffling on their coverage, we recommend that you first contact airlines and hotels to see if you can either receive a refund or change your bookings to a different date.
Coronavirus-Specific Travel Policies
Specific travel policies regarding the coronavirus will depend on who you booked travel with and through. In most cases, you’ll find that the travel providers you booked with will be the most likely parties to issue refunds or waive change fees. If that doesn’t work, then you can try reaching out to the provider of your credit card insurance.
Airlines
Several airlines have provided information regarding flight changes due to the coronavirus:
Air France: Trips booked for before May 31 can be postponed to no later than November 30 without change fees. More information is available via Air France’s press release.
Alaska Airlines: Tickets purchased on or before February 26 for flights between March 9 and April 30 can be changed or canceled without a fee, per Alaska. Canceled flight funds will be credited for future fares.
American Airlines: Change fees are waived for those who book travel through March 31. More information can be found on American Airlines’ coronavirus updates page.
British Airways: Bookings made from March 3 to May 31, as well as existing bookings up to May 31, can have both the destination and date of travel changed for free. More details are available on the British Airways’ website.
Delta Airlines: Any Delta ticket for flights in March or April is rebookable without change fees until December 31. Delta also has a coronavirus updates page.
JetBlue: Those traveling March 10 through April 30 will have change fees waived, according to JetBlue’s travel alerts page. For cancellations, JetBlue will credit the fare amount in the form of travel credit that is valid for one year.
Southwest Airlines: Southwest does not charge customers change or cancellation fees. Airfare from canceled plans can be credited for a future trip up to one year after the original purchase date. Southwest has set up a coronavirus information page.
United Airlines: Flights booked now through March 31 can be changed for free over the next 12 months. Additionally, all tickets issued on or before March 2 with original travel dates between March 9 and April 30 can be changed without a fee. More info can be found on United’s website.
Hotels & Lodging
If you booked with one of these hospitality firms, you may be able to receive some financial relief:
Airbnb: Reservations made on or before March 14 with a check-in date before April 14 can be canceled before check-in without a fee. Hosts can also cancel bookings without a charge or change to their Superhost status. For more information, visit Airbnb’s policy page regarding the coronavirus.
Choice Hotels: For those traveling within the US and Canada, changes or cancellations may be made without a charge up to 24 hours before arrival as long as the change/cancellation is made before April 30. A press release contains more info.
Hilton: All reservations scheduled for arrival before April 30 can be changed or canceled without a fee up to 24 hours before arrival. Hilton has more details, as well as information about the Hilton Honors program, on its website.
Hyatt: Any reservation for arrivals before April 30 can be changed or canceled at no charge up to 24 hours before the scheduled arrival. Hyatt has posted more details on its website.
IHG: Cancellation fees for existing and new bookings up through April 30 have been waived. IHG has updated its travel advisory page for coronavirus information.
Marriott: Cancellations and changes made before April 30 can be done at no charge up to 24 hours before the scheduled arrival date. Marriott’s press release has more info.
Credit Cards
Here’s a quick rundown of what a few of the bigger credit card companies are doing for travelers:
American Express: Amex has created a coronavirus hub for travel customers. For bookings made through American Express Travel, Amex will be honoring their travel partners policies and plans to waive fees on flight modifications or new bookings made through April 30. American Express further offers a FAQs page for trip cancellation/interruption insurance regarding the coronavirus and its credit cards.
Capital One: A FAQs page covering travel insurance and the coronavirus is up on Capital One’s website. Capital One advises customers to contact Visa or Mastercard directly with questions regarding travel insurance. For trip changes, Capital One recommends reaching out to the travel providers you booked with.
Chase: Chase suggests reaching out to travel partners, according to a support page on its website. Otherwise, Chase recommends that cardmembers check their benefit details or to reach out to Chase’s customer service with questions.
Other Ways To Get Your Money Back
Unfortunately, it may be difficult to trigger your travel insurance unless you get sick or are ordered to otherwise stay home by a doctor or the government. And because airlines aren’t simply offering free refunds, you may wind up being on the hook for travel costs. However, airlines are relaxing their change policies. This means that if you can change your plans to a later date or if you can change your flights for a different trip down the line, you may be able to soften the financial blow to your business.
If you find yourself unable to cover travel costs right now, you may be eligible to apply for a line of credit. Other financial help can be found via SBA disaster loans or emergency business loans. To save money elsewhere, look at what your credit card issuer is doing to work with those struggling to make credit card payments due to the coronavirus.
For more small business guides covering the coronavirus pandemic, check out Merchant Maverick’s hub.
For all general coronavirus information, we suggest visiting the CDC website.
The post When & How To Get Your Money Back If You Cancel Business Travel Because Of The Coronavirus appeared first on Merchant Maverick.
