Forewarned is Forearmed. Thanks for the pointer. I will be very careful to
make certain I pay the entire balance via an easily traceable method
(electronic bank transaction), and watch for the balance when it hits. If
it is not Zero I will call and see why not. And, I guess I better see if
the Dell account is an open line of credit, or only a one-off line for that
one purchase. I know the credit check was run against my business, and not
opened as a personal credit line, so my personal credit bureau reports will
never show the business credit activity - which is fine with me.
Funny thing how that works. Business credit is established based on
personal and/or business credit history. Said business credit will never
appear on a personal credit reports provided all is being serviced properly
by the business with the credit. Yet if a business does not keep on top of
their obligations the negative impact will show up on any business and
personal credit reports, even though it was a business credit issue, not
personal. I guess that is because I am personally guaranteeing any credit
loans for my businesses.
I have noticed an uptick in aggressive credit card offerings for small
businesses, like the companies I set up (2 sole proprietorships, one S-Corp
and one LLC), as of late. I think I figured out why (besides there is more
money in it for the banks). The fairly recent change in 2006 bankruptcy
laws make it harder for consumers to get relief from creditors. In exchange
for the legislation the banks are now required to collect a higher amount of
principal from consumers with their credit card monthly minimum payment
amounts. For some banks they would have a monthly minimum for the interest
and only a token amount for principal, thereby keeping minimum amount payers
on the hook for decades and sucking out perpetual interest fees. Now the
credit cards are hitting higher payment amounts, almost double what used to
be due in some cases.
But, those new laws must not apply for business credit card accounts. I pay
off the balance on my corporate credit card monthly, as I use the account
for client purchases. But, I have noticed the minimum amounts due are
almost exactly the amount of interest that would be charged, something
consumer credit card accounts can no longer do. Amazing, until all this
happened it would have been very difficult for me to get any kind of bank
loan or business credit card with any kind of decent line of credit. Now I
am getting them thrown at me from all directions. I have had enough credit
offered to let me use the accounts to buy a nice house were I so inclined -
which may be good for my one business where I do have a rental home. If I
came across a great deal, and had to move quickly I could do so, then
refinance with a conventional mortgage when I had some breathing room.
Truly amazing. In 1991 when I first went off on my own, I would have had to
put my Lincoln up for collateral to get a loan for a laptop PC. I balked,
and scratched up enough business using a PC and monitor I hauled around
instead, until I had the cash for the laptop. I never forgave the bank
officers for their indifference, which could have cost me getting a project
I needed a PC for, and the laptop would have been ideally suited for. The
project paid enough to purchase several laptops, but that was not good
enough cuz I was working out of my home ("If you had an office we may be
able to do more for you." Yeah, and add another $1,500 monthly overhead
expense in a startup business! Idiots.)
Until the other year I worked with cash and personal credit for client
purchases, and had some huge lines of personal credit. Once I picked up
these business lines I closed most of my personal credit accounts, and
reduced my available credit on the personal accounts I kept, thus boosting
my credit ratings into the stratosphere (I had very strong ratings before
all this). Now I run almost all purchases through the business accounts,
and hardly anything through the personal accounts. Life is good. But I
wish I knew I had earned the business lines due to past successes, not
because banks are looking for a new way to squeeze a profit through interest
charges by skirting around the new consumer laws. They are still a bunch of
bastards <g>!
Gil
> -----Original Message-----
> From: [EMAIL PROTECTED]
> [mailto:[EMAIL PROTECTED] Behalf Of Michael Madigan
> Sent: Thursday, May 17, 2007 2:25 PM
> To: [EMAIL PROTECTED]
> Subject: RE: [NF] Dell Getting Sued by NY State
>
>
> It's even worse for me.
>
> I bought a computer for $1500.00 at 23%. I paid it
> off in a month. Somehow there was a small balance of
> like $25.00 or so. In the confusion, I didn't pay the
> $25.00 the next month. They closed my account. This
> is now a mark against my credit. I had the money to
> pay by my Visa check card at the time I bought it, but
> was talked into getting a credit line by the sales
> person
>
>
>
> --- mrgmhale <[EMAIL PROTECTED]> wrote:
>
> > I caught that article Wednesday, found it
> > interesting. I actually began to
> > purchase Dell equipment due to an excellent service
> > experience one of my
> > clients had. I do have extended service contracts
> > for my Dell Servers, and
> > luckily thus far have not had need to use them. As
> > for the bait-and-switch
> > practices of Dell's finance arm, I can see how one
> > could be confused by
> > their finance terms. I recently ordered a Dell 1900
> > Server for a client. I
> > was going to purchase it using my corporate Visa,
> > and pay that off upon
> > receiving payment from my client. The sales rep
> > advised I could get 2% off
> > the purchase price if I were to use a Dell Small
> > Business loan instead. As
> > long as I paid the loan within 60 days there would
> > be no interest charge
> > (same as cash), The discount was less than $50, but
> > my clients (car
> > dealerships) are watching each penny in the current
> > market, so I agreed to
> > let her get me set up with a business loan. I did
> > qualify for a tax free
> > reseller's transaction, so I also avoided a
> > double-tax bump on the
> > transaction.
> >
> > Well, the Dell Small Business loan eContract came
> > through, and going through
> > the finance approval process delayed the Server
> > build by 2 days. When I
> > received the eContract it stated there was a $75
> > processing fee, and if I
> > did not pay the balance within 60 days there would
> > be a 19% interest rate.
> > The interest rate, although it is going to be a
> > non-issue for me, really
> > surprised me because my credit rating is extremely
> > strong, and I am used to
> > getting rates under 8% for pretty much any credit
> > offer for a business
> > related matter. But the $75 processing fee really
> > ticked me off as it would
> > pretty much eat up every bit of the expected 2%
> > savings and more. All that
> > would have happened is the amount "saved" via the
> > discount would move to
> > another pocket other than mine or my client's.
> >
> > I called and diplomatically asked about the $75
> > processing fee. The Sales
> > Rep then told me that only applied if I did not pay
> > within 60 days. We will
> > see. It was not disclosed to me in advance, and if
> > it turns out I get hit
> > with that fee anyway there is going to be hell to
> > pay - just because I will
> > feel rather abused. At best the fee should have
> > been disclosed, whether it
> > would have affected me or not. BTW, I have not yet
> > received the first
> > statement for that business loan (20 days and
> > counting), so it is not yet
> > paid. I am hoping to get the statement in time to
> > pay it off in one payment
> > before the initial 60 day period. I had no reason
> > to be so suspicious of
> > Dell at the beginning of that transaction. But that
> > $75 processing fee "oh,
> > by the way" really got my attention. Now I feel I
> > need to watch for any
> > potential ambush. Shame, such a silly
> > misunderstanding that could have been
> > pre-explained - and I advised the sales rep of that
> > recommendation.
> >
> > Gil
> >
> > > -----Original Message-----
> > > From: [EMAIL PROTECTED]
> > > [mailto:[EMAIL PROTECTED] Behalf Of
> > Michael Madigan
> > > Sent: Thursday, May 17, 2007 3:47 AM
> > > To: [EMAIL PROTECTED]
> > > Subject: [NF] Dell Getting Sued by NY State
> > >
> > >
> > >
> > >
> > >
> >
> http://www.nytimes.com/2007/05/17/business/17dell.html?ref=technology
> > >
> > >
> > >
[excessive quoting removed by server]
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