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STRATEGIC ISSUES...ONLINE
For week of January 3, 2005,
Issue #193
- Featured Articles:
1. What Late Payments Can
Really Cost You
2. Guarding Against Fraud
3. Tech Tip Weekly: Several
Excerpts from CPAs Top Ten Technologies for 2005
4. Compliance Calendar
5. Archived 'Strategic
Issues...Online' Articles Now Available!
1. What Late
Payments Can Really Cost You
Swamped by post-holiday credit card bills, you miss a
payment deadline. What's the worst that can happen? You
figure you'll have to pay a late-payment penalty and perhaps
a little extra interest. No big deal. Wrong! You might
soon receive a letter from your credit card company telling
you that they're sharply increasing the interest rate on
your card. And that could be followed in a few weeks by
higher rates on your other credit cards, even if you're
current on payments to them.
How can this happen? You'll find the answer in your credit
card agreement. Buried in the very fine print, you'll
almost certainly find a provision giving the credit card
company the right to change the interest rate you pay.
Sometimes it's tied to your being late with a payment or
failing to pay the minimum amount due. Sometimes it's just
a blanket provision allowing them to change the terms at any
time.
But how does this affect your other cards? The reason it
might is that a late payment will promptly show up on your
credit report. And lenders are checking credit reports with
increased frequency these days. If you're late with a
payment, they figure it could be a sign that you're becoming
a poor credit risk. So they want to charge you higher
interest to compensate for the higher risk.
Even that may not be the full impact, though. You might
find that your auto insurance becomes more expensive at the
next renewal. Insurance companies are checking credit
reports too. They believe drivers with poor credit tend to
make more claims, so they're starting to take credit into
account when setting your insurance rates. If you obtain a
copy of your credit report, you'll likely see a credit
inquiry from your insurer.
Be aware that one late payment can have a ripple effect on
all your credit cards and loans and could even affect your
auto insurance. With that in mind, make sure you open your
bills immediately and get those checks written in good
time.
2.
Guarding Against Fraud
Here are some tips to help protect yourself from credit and
charge card fraud.
Do:
-Sign your cards as soon as they arrive.
-Carry your cards separately from your wallet, in a zippered
compartment, a business card holder, or another small pouch.
-Keep a record of your account numbers, their expiration
dates, and the phone number and address of each company in a
secure place.
-Keep an eye on your card during the transaction, and get it
back as quickly as possible.
-Void incorrect receipts.
-Destroy carbons.
-Save receipts to compare with billing statements.
-Open bills promptly and reconcile accounts monthly, just as
you would your checking account.
-Report any questionable charges promptly and in writing to
the card issuer.
-Notify card companies in advance of a change of address.
Don't:
-Lend your card(s) to anyone.
-Leave cards or receipts lying around.
-Sign a blank receipt. When you sign a receipt, draw a line
through any blank spaces above the total.
-Write your account number on a postcard or the outside of
an envelope.
-Give out your account number over the phone unless you're
making the call to a company you know is reputable. If you
have questions about a company, check it out with your local
consumer protection office or Better Business Bureau.
3. Tech Tip Weekly:
Several Excerpts from CPAs Top Ten Technologies for 2005
The American Institute of CPAs annual survey results are in,
and you should take notice for impact on your business,
since your CPA will be concerned too:
#1. Information Security - The hardware,
software, process and procedures in place to protect an
organization's information systems from internal and
external threats. This is the third year in a row that this
has headed the list!
#4. Spam Technology - The use of technology
to reduce or eliminate unwanted e-mail commonly known as
Spam.
#5. Disaster Recovery - The development,
monitoring and updating of continuity plans in the event of
a loss of business information resources through theft,
virus/malware infestation, weather damage, accidents or
other malicious destruction.
Contact us to further discuss your questions and concerns.
4. Compliance
Calendar
January 5
-Employers deposit social security, Medicare, and withheld
income tax for payments on December 29, 30, and 31.
5. Archived
Strategic Issues...Online Articles Now Available!
Prangley Marks, LLP now has archived articles on it's
website at www.pmcpa.com.
You will find the link on the left-hand side of the home
page. Take a look and check it out!
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Prangley Marks, LLP
Accountants and
Consultants
"The Way We Figure, We Are
The Only CPA Firm You Will
Ever Need"
333 Bridge Street, NW,
11th Floor Bridgewater
Place, Grand Rapids, MI
49504-5356
Phone#: 616-774-9004,
Fax#: 616-774-9081