Using Credit

Hi,
Credit only became a common financial instrument available to virtually anyone over the last thirty years. Before credit cards were made so widely available and marketed aggressively, applying for credit had a sense of seriousness to it which is lost in our current culture of debt. When my father started using credit, his intention was to consolidate purchases into one monthly bill and pay it at the end of each month. The thought of carrying a balance would have been appalling to him. Now we accept credit card balances and interest as a way of life. The barrage of credit card applications that students receive is unbelievable. It's possible that one reason many of them start early adulthood as indentured servants to the credit industry is that they were bombarded with credit card applications and applied for and received credit they were ill equipped to repay. Many of them started using credit without understanding how the credit agreements they signed even work. Over the next week, I'm going to write about how to make decisions regarding how to use credit, how to maintain and protect a good credit score, and how to get back on track if credit use is getting out of hand.
Until then,
Alan

Documenting Credit Inquiries

Hi,
When a small business owner or individual shops for financing, these are some important points to consider for every phone call to financial institutions:
1) Write down the full name, phone number and extension of the individual with whom you communicated.
2) Write down everything related to the particular financing that is being inquired about.
3) If applicable, inquire about the cost of insurance and service agreements.
4) If the purchase is subject to warranty, write down the specifics of the warranty. This will allow you to compare warranties among financial institutions and/or manufacturers.
5) Request that the individual email you a copy of your conversation.
By writing down all communication with financial entities, it will enable a more expeditious and prudent decision to be made. It will eliminate the unscrupulous salesperson, who does not disclose the full terms and conditions of various financial instruments until the customer is ready to close the document, to railroad you into signing for financing you don't feel comfortable about.
It is a good idea at the close of all conversations to reiterate what has been written down in order to prevent future misunderstandings.
Tomorrow I'm going to write about documenting collection calls.
Until then,
Alan

Resolving A Disputed Cell Phone Bill

Hi,
The first thing we encounter when we call the cell phone company is that we have to navigate through an extensive electronic maze before reaching a customer service representative. After going through an excellent security screening process, we are cleared to discuss our account concerns with a representative. As soon as the itemized call detail is accessed, we realize numerous calls have been charged to our phones which were not made by us. The representative accommodates us and solves the problem by issuing us an immediate credit for the amount of the disputed charges. We then request that in the future, we are sent an itemized call detail with every bill. We are left with the impression that the billing mistakes are an isolated incident, and that we won't have to worry about our cell phone bill anymore. Thirty days later our second cell phone bill arrives. We are disappointed that no credit was given on the bill, and in fact, the amount of the credit shows up as past due. As we investigate further, we see that the any time minutes were not exceeded. However, there are mysterious $9.99 charges on three of the phones. Tomorrow, it's round two with the phone carrier.
Until then,
Alan

The Evolution of the Collection Department: Part 2

Hi:
In the past few blogs, I have identified some of the problems which developed when computers were introduced into collections departments over the last thirty years. Some of the advantages of computerization are as follows:
1) It allows credit and collections departments to compile statistical data identifying problems and enables the departments to quickly deal with them.
2) Computers allow instantaneous communication among credit, sales and collection departments, transferring documents, pictures etc., throughout the departments.
3) Computers have virtually eliminated one huge problem of the past for retailers in dealing with NSF checks through point of sale terminals.
4) Advanced computerized phone systems have allowed companies to reduce their staff by having many questions electronically answered.
In a well run company the sales, credit and collection departments work in concert. Each department needs the help of the other and can utilize the experiences of each other. Unfortunately, many companies have done away with 75% of their experienced credit and collection people, thereby making it harder for the consumer to be dealt with in a personal manner. The only remedy for this situation is generally to talk with supervisors and sometimes even the bosses of supervisors. One needs to go up the ladder to find a professional with the authority to deal with a particular situation. Monday I will talk about collection agencies.
Have a good weekend.
Until then,
Alan