Massage & Bodywork

July/August 2012

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SMART CREDIT Major Credit Agencies Equifax PO Box 740241 Atlanta, GA 30374 www.equifax.com Credit report: 800-685-1111 Report fraud: 800-525-6285 Experian PO Box 2104 Allen, TX 75013 www.experian.com Credit report: 888-397-3742 Report fraud: 888-397-3742 TransUnion 760 Sproul Road PO Box 390 Springfield, PA 19064-0390 www.transunion.com Credit report: 800-916-8800 Report fraud: 800-680-7289 8. Be Aware of the Differences Between Debit and Credit Cards While there are similarities between debit and credit cards, the differences can significantly affect the cash flow in your practice. It's easier to qualify for a debit card than a credit card because there's no credit involved. When you use a debit card, you must already have the money in your business account at the bank. Your purchase is debited from your account electronically as soon as you make your purchase. Using a debit card is almost like using cash. Unlike writing a check, using a debit card saves you from having to show identification when you conduct a transaction. Having a debit card not only frees you from carrying cash, it will be more readily accepted than checks. However, debit cards carry their own set of disadvantages you need to know about. Unlike credit cards, debit cards give you no grace period for paying your bill. The money is deducted from your account immediately each time you use it. Keeping your account in balance can be a problem. It's easy to misplace a receipt and forget to note the transaction in your check register. That can result in overdrawn accounts and financial penalties. While you get protection from liability due to fraud on both credit card and debit card purchases, debit cards do not offer the same protection as credit cards in the case of defective or unsatisfactory merchandise. With credit cards, you may dispute errors or unauthorized charges and withhold payment until the matter is resolved. This allows you to use the money while the credit card issuer investigates the circumstances. With a debit card, your money is irrevocably spent the moment you complete the transaction. If you pay off your credit card balances in full each month, the last thing you need is a debit card. You're now enjoying up to 30 days of free use of someone else's money. This is "using the float"—the period between the purchase date and when the money is actually withdrawn from your account. In this case, congratulate yourself on your financial acumen and hang on to those credit cards. 9. Never Combine Business and Personal Funds Some experts compare unwise use of credit to use of drugs: it can offer short-term pleasure in exchange for long-term pain. Once the credit monster gets its hooks in you, it can be painfully difficult—and sometimes impossible—to free yourself. However, credit in itself is not William J. Lynott has an extensive background in management consulting, marketing, and finance. He's written more than 900 articles appearing in a wide range of consumer magazines, trade publications, and newspapers in 17 countries. Contact him at lynott@verizon.net. harmful; used skillfully, it can be a profitable tool for managing your business affairs. Use these tips to help make credit one of your business assets, not one of your liabilities. Celebrate ABMP's 25th anniversary and you may win a refund on your membership. ABMP.com. 99

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