How banks make money off of credit cards
PART TWO OF TWO
Credit cards remain a mystery to many individuals. While it is assumed by many that credit card companies earn revenue based solely on interest paid by consumers, truth be told there’s a lot more that brings companies such sizable benefits.
Many know that Mastercard and Visa show up on banking cards from Bank of America, Wells Fargo and Chase, and that if not paid off one will then be charged an interest rate on the balance of their card. Often times an individual will come across hidden fees in their billing statement. But where does all this money go?
Let’s look at Bank of America. Bank of America bears the risk that customers won’t pay their monthly balance, so they set interest rates and fees. If one doesn’t pay off the balance, then Bank of America begins to bring in the wealth. But what if you’re the responsible individual who sensibly pays off their card every month? Does that mean Bank of America fails to make any money off of you? Of course not.
These companies will squeeze in revenue by charging fees, soliciting warranties and advocating additional identity theft protection packages. According to CreditCards.com, the nine largest credit card issuers earned a combined profit of about $3.85 billion in 2010 from a total of more than 1 billion issued cards. Evidently, the credit card industry is doing a fine job at making money, even through their most responsible customers.
In order to really comprehend how credit card companies make money, one must first factor in all the players. There’s the credit card company (like Mastercard), the customer, the credit card issuer (Capital One), the merchant (say Qdoba for instance) and the merchant’s bank (Wells Fargo). You’re heading to Qdoba to pick up a late-night burrito with some friends and the total bill comes to $8. You hand over your Capital One Mastercard and the cashier swipes the card. In the blink of an eye Qdoba has their money and you have your stuff. But what just happened?
In a matter of seconds, the card reader recognized who you were and contacted Capital One. Capital One sent $8 to Wells Fargo (Qdoba’s bank) and Wells Fargo added the $8 to Qdoba’s merchant account. Capital One then increased the balance of your credit card by $8. So it should be obvious how all of them made money, but what about Mastercard? Companies like Mastercard and Visa are “retail network managers”. Betty Riess, senior vice president of Bank of America in the San Francisco Bay Area, explained it like this, “If all the other participants are driving down the highway to make these transactions, Mastercard is the paved road. Like a toll road, you have to pay to play.”
The way this works in the example is Wells Fargo won’t give Qdoba the full $8, they’ll subtract 20 cents and give Qdoba $7.80. In other words, for an $8 purchase Capital One charges your account $8, but only gives $7.80 to Qdoba via Wells Fargo. That 20 cents is given to Capital One who then splits it with Mastercard.
Aside from the small fees that exist in every transaction with credit card use, many know that companies also charge interest rates. Tanisha Warner, an experienced financial counselor with Consumer Credit Counseling Services of Linn Benton, says that “the greatest benefit of issuing credit cards for companies and banks is the ability to collect interest revenue from cardholders. With so many people failing to make their monthly payments, the interest paid by millions of cardholders really adds up.”
In addition to interest earnings, credit card issuers often collect additional income through fees from cardholders that are not associated with any type of expenditure, which allows banks to make a pure profit on these amounts. Retailer fees are the most common. Every business that accepts credit cards must pay a commission on the sale to the issuing bank. This fee is usually a compensation for the technological procedure necessary to process the charges from business customers.
The benefits received by credit card companies and banks have outweighed the benefits to cardholders in recent years, so much that in 2009, President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure Act. This law is intended to favor cardholders by increasing the clarity of credit card terms and agreements and eliminating the ability of card issuers to make unannounced changes in interest rates and other conditions, while still encouraging greater responsibility on the part of cardholders.
Gabriella Morrongiello, reporter
news@dailybarometer.com
On Twitter: @gabriellahopem
Article source: http://www.dailybarometer.com/news/how-banks-make-money-off-of-credit-cards-1.2872867
9 Qualities of Extraordinary Entrepreneurs
Good entrepreneurs make money. Great entrepreneurs make serious money.
But remarkable entrepreneurs do more than make money. They are the few who possess qualities that don’t appear on balance sheets but do make a significant impact on the lives of their employees, industries, and communities.
Here are nine qualities of remarkable entrepreneurs:
1. They find happiness in the success of others.
Great business teams win because their most talented members are willing to sacrifice to make others happy. Great teams are made up of employees who help each other, know their roles, set aside personal goals, and value team success over everything else.
Where does that attitude come from?
(MORE: Don’t Make These Mistakes at Your New Job)
You.
Every great entrepreneur answers the question, “Can you make the choice that your happiness will come from the success of others?” with a resounding “Yes!”
2. They relentlessly seek new experiences.
Novelty seeking—getting bored easily and throwing yourself into new pursuits or activities – is often linked to gambling, drug abuse, attention deficit disorder, andleaping out of perfectly good airplanes without a parachute.
But, according to Dr. Robert Cloninger, “Novelty seeking is one of the traits that keeps you healthy and happy and fosters personality growth as you age… if you combine adventurousness and curiosity with persistence and a sense that it’s not all about you, then you get the creativity that benefits society as a whole.”
As Cloninger says, “To succeed, you want to be able to regulate your impulses while also having the imagination to see what the future would be like if you tried something new.”
Sounds like every successful entrepreneur I know.
So go ahead – embrace your inner novelty seeker. You’ll be healthier, you’ll have more friends, and you’ll be generally more satisfied with life.
3. They don’t think work/life balance; they just think life.
Symbolic work-life boundaries are almost impossible to maintain. Why? You are your business. Your business is your life, just like your life is your business – which is also true for family, friends, and interests—so there is no separation, because all those things make you who you are.
Remarkable entrepreneurs find ways to include family instead of ways to exclude work. They find ways to include interests, hobbies, passions, and personal values in their daily business lives.
If you can’t, you’re not living—you’re just working.
4. They’re incredibly empathetic.
Unless you create something entirely new—which is very hard to do—your business is based on fulfilling an existing need or solving a problem.
It’s impossible to identify a need or a problem without the ability to put yourself in another person’s shoes; that’s the mark of a successful entrepreneur.
But remarkable entrepreneurs go a step farther, regularly putting themselves in the shoes of their employees.
Success isn’t a line trending upwards. Success is a circle. No matter how high your business—and your ego—soars, success still comes back to your employees.
5. They have something to prove – to themselves.
Many people have a burning desire to prove other people wrong. That’s a great motivator.
Remarkable entrepreneurs are driven by something deeper and more personal. True drive, commitment, and dedication springs from a desire to prove something to the most important person of all.
You.
6. They ignore the 40-hour workweek hype.
Studies show that working more than 40 hours a week decreases productivity.
Whatever.
Successful business owners work smarter, sure, but they also outwork their competition. (Every successful business owner I know who reads those stories probably thinks, “Cool. Hopefully my competitors will believe that crap.”)
The author Richard North Patterson tells a great story about Robert Kennedy. Kennedy was seeking to indict Teamsters head Jimmy Hoffa (who some believe is chilling in Argentina with Elvis and Jim Morrison). One night Kennedy worked on the Hoffa case until about 2 a.m. One his way home he passed the Teamsters building and saw the lights were still on in Hoffa’s office, so he turned around and went back to work.
(MORE: Solar Eclipsed: Could U.S. Solar Industry be growing faster?)
There will always be people who are smarter and more talented than you. Remarkable entrepreneurs want it more. They’re ruthless—especially with themselves.
Remarkable entrepreneurs simply work harder. That’s the real secret of their success.
7. They see money as a responsibility, not a reward.
Many entrepreneurial cautionary tales involve buying 17 cars, loading up on pricey antiques, importing Christmas trees, and spending $40,000 a year for a personal masseuse.
Wait—maybe that’s just ex-Adelphia founder John Rigas.
Remarkable entrepreneurs don’t see money solely as a personal reward; they see money as a way to grow the business, reward and develop employees, give back to the community… in short, not just to make their own lives better but to improve the lives of other people too.
And most importantly they do so without fanfare, because the true reward is always in the act, not the recognition.
8. They don’t think they’re remarkable.
In a world of social media everyone can be their own PR agent. It’s incredibly easy for anyone to blow their own horn and bask in the glow of their insight and accomplishments.
Remarkable entrepreneurs don’t. They accept their success is based on ambition, persistence, and execution… but they also recognize that key mentors, remarkable employees, and a huge dose of luck also played a part.
Remarkable entrepreneurs reap the rewards of humility, asking questions, seeking advice, recognizing and praising others…
9. They know that success is fleeting, but dignity and respect last forever.
Providing employees with higher pay, better benefits, and greater opportunities is certainly important. But no level of pay and benefits can overcome damage to self-esteem and self-worth.
The most important thing remarkable entrepreneurs provide employees, customers, vendors – everyone they meet – is dignity.
And so should you, because when you do, everything else follows.
Read more from Inc.com: 
The 5 Qualities of Remarkable Bosses
5 Things Remarkable Bosses Never Do
Article source: http://business.time.com/2012/05/17/9-qualities-of-extraordinary-entrepreneurs/
Rihanna, Eminem, Bono—Which Celebs Will Make the Most Money From Facebook's IPO?
George Pimentel/WireImage; Kevin Mazur/WireImage; JustinSullivan/Getty Images
With the big Facebook public offering coming up, do any stars stand to get any richer? What about the celebrities who have the most Likes on Facebook?
—Ms. Ravenclaw, via the inbox
You speak of the spectacularly overhyped tech company founded by That Guy Who Inspired That Spectacularly Overhyped Oscar Bait Movie. This week the 8-year-old company plans to float to about 421 million shares of its stock. The world is freaking out, just freaking out, noting that Facebook founder Mark Zuckerberg stands to rake in an estimated $1.25 billion from the offering.
As far as who else will get rich, yes, there is a big star out there, a bona fide celebrity, who stands to make millions:
SADDLE UP: What’s Armie Hammer Up To Next?
How about Bono?
Yes! Bono!
The U2 musician who already has an estimated net worth of something like $900 million is set to make even more this week. Why? Because his investment company, Elevation Partners, holds a stake in Facebook said to be worth hundreds of millions. How much the company might sell isn’t clear; neither is the exact profit, if any, Bono might directly make. But whatever happens, the singer’s net worth will likely rise, says Aaron Task, who has been following the story as cohost of The Daily Ticker on Yahoo! Finance.
As for the celebrities who are the most popular on Facebook, let’s see who we have. According to our research, the most popular star is—get this—Eminem, who has more than 57 million likes. Rihanna comes in second with more than 55 million, followed by Lady Gaga, Shakira and the late Michael Jackson.
Will they get even richer through Facebook as well? Not likely. Not unless they bought a stake in the company at one point.
“There have been people over the years who have done work for Facebook and who took payment in company stock instead of cash,” Task tells this B!tch.
So, theoretically, if Gaga, say, played the company Christmas party a few years back and took a stock payment, she could get richer this week.
PHOTOS: 20 Biggest Celebs on Facebook
Staree: A New Way To Make Money Online with Videos and Photos
My friends over at IZEA have just pulled back the curtains to their newest social media platform: Staree.
Staree allows users to post photos and videos from their mobile device or desktop, and share them with friends through Facebook and Twitter. Users make money from display advertising targeted to their content and product placement in photos and videos. Ted Murphy, Founder and Chief Executive Officer of IZEA, has this to say about his new baby.
IZEAâs mission is to help social
media fans monetize their content, creativity and influence. We brought paid blogging to the market six years ago, and were pioneers in sponsored tweets and check-ins. The monetization of photos and videos through Staree is a natural addition to the IZEA product portfolio. It creates new ways for influencers to earn money and new marketing opportunities for advertisers.
Starting today, Staree is available to everyone: From Hollywood A-listers to everyday people. The hottest celebrities like Kendall Schmidt and Logan Henderson are already using Staree to take their social media presence to the next level. Kendall got his start on hit shows like “Frasier” and “ER” and is currently starring on Big Time Rush.” His co-star Logan found his passion for acting after appearing on “Friday Night Lights.”
Staree is designed with branding, protection and collaboration in mind. Users have the ability to customize their profile and copyright their content. Managers and agents can access their client’s accounts and post on their behalf. “Our goal was to provide professional features through a simple user interface that anyone could use on the web, iPhone or Android device, said Ryan Schram, Chief Marketing Officer, IZEA.
John Chow dot Com on Staree
I have been using Staree for the past three days. So far, I have six photos and a video on the network. All the media was uploaded via the Staree iPhone app. The app hasa bunch of filters so you can give your photos that Instagram look. Unlike Instagram, Staree can post videos, photos and messages.
Uploading a photo is a lot like Instagram: fire up the app, take the photo, choose the filter and write a description. You can send a photo to your Facebook or Twitter stream. The process is the same for making a video, but there are no filters at this time.
Making Money Online with Staree
Like I said before, I’ve been using Staree for only three days and uploaded half a dozen photos. Still, that was enough to make me 74 cents yesterday.
At this rate, I’ll make enough for a nice lunch at the end of the month, but I’m just getting started. I do see good potential with Staree. As the network gets biggest, the income can only increase. And the money-making potential of Staree will attract over a lot of Instagram users. Why make nothing uploading photos to Instagram when you can make money uploading it to Staree? Give Staree a try and let me know what you think.
Become a Social Media Star with Staree
This article courtesy of Staree: A New Way To Make Money Online with Videos and Photos
Related Posts
Article source: http://www.iwks.com/staree-a-new-way-to-make-money-online-with-videos-and-photos.html
Investments: make money from water
The fund has a 14pc weighting in China alone, as well as exposure to Brazil,
India and Singapore.
“There is a huge opportunity in emerging markets where populations are growing
immensely. There often is not enough water to go around and where there is
water it is polluted,” he said.
Impax is dedicated solely to environmental services investing, with holdings
in alternative energy, water and waste, with both global and geographically
focused funds.
The investment philosophy revolves around the four key themes of resource
scarcity, pollution, energy security and climate change.
Balancing this ethical approach with investors’ need to make a profit is part
of what drives Mr Jenkyn-Jones.
“You need to invest to deliver clean water. There are many people in emerging
markets who are suffering because of dirty drinking water. It is only
through investment in clean-up technologies that the situation will change,”
he said.
“The rise in the price of water is mitigated for poorer people – but that rise
is what delivers the technology that benefit.”
