Foreign Transaction Fees - WHAT YOU DIDN'T KNOW

In today's world most consumers are plagued with a plethora of finance related taxes and fees. It is often hard to keep the myriad of hidden costs in check and is rarely worth devoting very much effort towards questioning these fees. However, there are some charges that can be dealt with if confronted. Foreign transaction fees on your credit card are one such example. Michael Weber is an everyday consumer who encountered on such foreign transaction fee. Here is his personal account of the scenario:

A few months ago I purchased a round trip ticket from Miami to Hamburg, Germany through Expedia, flying Air Berlin, using my MasterCard from Citibank. In the past I have always used my Amex card. Subsequently, I found a $27 foreign transaction fee on my statement and not knowing what this was for I called Citibank. They said that whenever a purchase is made from a foreign company, a charge of three percent will be incurred.

When I told them that I paid Expedia, which is a domestic company and not Air Berlin, they said that Expedia is just a middle man and they are paying Air Berlin directly - thus the $27. Unless I have been inattentive in the past I don't believe I ever paid this fee to American Express. Unlike most people, Weber was not satisfied with this response. As a result he decided to look deeper. He got in touch with Citibank, his credit card company, and HelpWithMyBank.gov, a government website dedicated to assisting consumers with banking problems.

The following is an excerpt from the response Weber received from his bank:

We recently received an inquiry on your behalf from the Comptroller of the Currency regarding the $27 foreign transaction fee assessed to your Citi Platinum Select Card account.

You indicate in your letter that you purchased an AirBerlin ticket via Expedia, which is a company in the United States; however, your account was assessed a 3% foreign transaction fee.

Although I certainly regret any misunderstanding, because the merchant billed the charge to your account from a foreign country, in accordance with the Card Agreement, the fee is considered valid.

However, as a gesture of goodwill, I credited the $27 foreign transaction fee, and this adjustment will appear on a subsequent statement.

Weber's success in confronting his foreign transaction fees clearly illustrates that such fees are negotiable. If you complain loud enough, your credit card company will remove it. Some think that foreign transaction fees ought to be illegal; however, until they are, we can continue to fight them one case at a time.

What A Qualified Bookkeeper Can Do To Save You Time And Money!

A number of people use a good bookkeeper who can do the following well and at much lower fees than a CPA. Use Quicken or (even better) QuickBooks to summarize your receipts, deposits and expenses from your checkbook and bank statements.

·         Set up rental property expense categories according to the deduction line items on the IRS rental property schedules, such as Schedule E; or on the highly preferred, lesser-audited partnership form 1065 (along with backup form 8825).

·         Assist you with recordkeeping and management systems that pertain to real estate. There are a number of excellent recordkeeping programs that are specifically targeted for real estate recordkeeping, and save a lot of time and accounting fees.  Once set up, these programs are fairly easy to use for you or your bookkeeper. See next for recommendations.

·    Assist you with property management. A good bookkeeper could also be a competent clerical assistant who could help with property management functions, such as taking tenant applications, typing leases, work orders and other internal management documents. But it is imperative that they abide by federal and state rules of fair housing, which you should inform them, including having a management systems manual. There are excellent property management programs out there. For the best, see Jeffrey Taylor, www.Mrlandlord.com, or Mike Butler www.mikebutler.com.

·         Prepare and send 1099s to independent contractors. There are excellent computer programs that the bookkeeper can use to do this.

·         Assist you with tax preparation using a tax preparation computer program. A lot of the work done by CPAs is "line-by-line form filing," but they charge higher "CPA" prices. There are easy-to-use tax-preparation computer programs (such as TurboTax or TaxCut) where your bookkeeper can assist you in the preparation of your taxes. In addition to 1040s, there are tax-preparation computer programs for partnerships and corporations. These programs get better all the time.

TIP 1: Before having a bookkeeper assist you with tax return preparation, you could first engage a competent CPA to do a one-time set up and preparation of your tax return in accordance with the Renaissance Goldmine strategies. Once set up, it will be much easier for the completion of your tax returns for later years. You then have could have the CPA review the returns every three years. If changes need to made, returns could be amended back three years for refunds.

TIP 2: There are also very competent bookkeepers who can do your entire tax return for you, do a great job and save you a bundle of fees. Just make certain they do it in accordance with the Renaissance Goldmine strategies (www.GoldmineSavesTaxes.com).

What a Bookkeeper Should Not Do For You: Internal Accounting Controls! In NO way should a bookkeeper handle cash or checks (money). This includes making up of deposit slips, taking deposits to the back, handling cash, signing checks ... NO signature stamps!

Small Businesses Utilize Credit Cards More Often, Says the Fed

According to the latest reports published by the Federal Reserve Board, small business credit card usage and the usage of credit lines has increased, dramatically.  As reported by the Washington Post, the increase was to from 34 percent in 1998 to nearly 50 percent in 2003.  The survey is conducted once every five years, and this is the most recent update.   Another interesting fact is that major credit card providers are targeting business owners offering business lines of credit more readily than ever.

What does this trend indicate and how does it affect the small business owner?  For those business owners that are "in on this latest trend" the outlook is good. Now, they can obtain the necessary financing they need instead of having to go through all of the work normally required to obtain a small business loan.

Years ago, to get business financing you had to really jump through hoops - supplying your bank with a business plan, financials, bank statements, etc.; it was so cumbersome and restrictive that only financially stable businesses would get approved - or business people who were extremely persistent at filling out paperwork and trying to work the system.  Many viewed the extensive documentation and application process as being more of a hassle than it was worth.

Many business strategists today say that with newer, less restrictive lending requirements that grant business credit based largely on personal guarantees from high FICO score individuals, it makes sense to amass large quantities of business credit and to use that capital to seize and take advantage of profit bearing business opportunities.  In a sense, it puts smaller business people into "the big boys' game" of using leverage to execute "big ideas."

Utilizing credit in this form is the growing trend, but it also makes sense.  It is easier to obtain, easier to apply for and most definitely applicable to most small business needs; Visa, MasterCard anyone?

When can telling the bank what you really want get you a denial?

This is an extremely interesting development revealed by Credit Card Builders. CreditCard Builders is a great source for interesting and cutting edge information about obtaining credit. Because they deal with such a high volume of applications they really see what's going on out there - what the trends are. In other words, they’ve got their "ear to the ground"

Here is a truly interesting story. A bank sends out a pre-approval notice that says, you're approved for $40,000. Nothing unusual there - however - they also have three optional boxes that can be checked when you send in your acceptance. One box said "get your funds transferred into your bank account immediately", another box said "please approve me for the highest amount of credit possible".

Basically, they make it look like these are completely acceptable boxes to check if you'd like - after all, you're already APPROVED. Beware - it has been the experience of our founder that the truth is a bit trickier. In actual fact, is appears that these boxes are hidden triggers being used by the bank to screenout "undesirables" into their credit system. Their logic is, 'if the person is that hard up for money, we don't want to lend them any money".

Obviously, the advice here is: don't check any such boxes when accepting pre-approved offers. You can always ask for a credit increase later. Don't risk your approval by checking any "too good to be true" boxes that accompany your approval.