The Pros & Cons Of Using Collection Agencies

May 24th, 2008

Debt collection agencies act on behalf of creditors to collect on severely overdue accounts. Reputable agencies work within specific guidelines and adhere to the legal framework set down in Fair Debt Collection Practices Act, the federal law that regulates all collection agencies.

There are several advantages in using these agencies -

• they remove the hassle of pursuing debts from your company, saving you time and money;

• third party involvement in debt collection has proven time and again to improve your chances of recovering your money; these people are specialists in negotiating with debtors and the results usually speak for themselves;

• potentially a skillfully negotiated debt collection could mean continued future custom from the debtor;

• debt collection agencies can combine sales ledger management and debt collection;

• debt collectors keep you within the law…

The disadvantages are -

• debt collection does cost money; you are trading off the debt collection against any charges made by the collection agency and/or a percentage of the money collected (although there are lower cost, flat fee alternatives);

• the debt collection agency will be establishing a relationship with your customers which could be potentially harmful if they sour that relationship by not dealing with invoices in a courteous and diplomatic fashion…

Finally, remember to select a collection agency with a good reputation. Don’t just shop for the best price. Remember- less reputable agencies can damage your own reputation as well as your wallet.

Tristan Andrews is a writer for Collection Agency Quotes.

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Credit Card Comparisons Guide

March 31st, 2008

Shopping around for a credit card can save you money on interest and fees. You’ll want to find one with features that match your needs. This information can help you

  • Understand the features of credit cards
  • Compare credit card features and costs
  • Know your rights when using your credit card
  • File a complaint if you have a problem with your credit card

    How will you use your card?

    The first step in choosing a credit card is thinking about how you will use it.

  • If you expect to always pay your monthly bill in full–and other features such as frequent flyer miles don’t interest you–your best choice may be a card that has no annual fee and offers a longer grace period.
  • If you sometimes carry over a balance from month to month, you may be more interested in a card that carries a lower interest rate (stated as an annual percentage rate, or APR).
  • If you expect to use your card to get cash advances, you’ll want to look for a card that carries a lower APR and lower fees on cash advances. Some cards charge a higher APR for cash advances than for purchases.

    What’s the APR?

    The annual percentage rate–APR–is the way of stating the interest rate you will pay if you carry over a balance, take out a cash advance, or transfer a balance from another card. The APR states the interest rate as a yearly rate.

    How long is the Grace Period?

    The grace period is the number of days you have to pay your bill in full without triggering a finance charge. For example, the credit card company may say that you have “25 days from the statement date, provided you paid your previous balance in full by the due date.” The statement date is given on the bill.
    The grace period usually applies only to new purchases. Most credit cards do not give a grace period for cash advances and balance transfers. Instead, interest charges start right away.

    If you carried over any part of your balance from the preceding month, you may not have a grace period for new purchases. Instead, you may be charged interest as soon as you make a purchase (in addition to being charged interest on the earlier balance you have not paid off). Look on the credit card application for information about the “method of computing the balance for purchases” to see if new purchases are included or excluded. Information on methods of computing the balance is in the section “How is the finance charge calculated?”

    These are just some of the considerations you will have to be aware of when choosing a credit card. The bottom line is that you should always read the small print and think about what it is you are agreeing to and whether or not this is what you need.

    Joseph Kenny is the webmaster of the credit card comparison sites www.credit-cards-info.com/ and also www.creditcards121.com/

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