Published on: 15 April 2023
Last Updated on: 09 February 2026
Whether you are a new credit card holder or have been using it for a while, you must have come across some credit card jargon that is hard to decipher. For instance, if you decide to apply for a credit card online, you might need to understand the annual fee, interest rate, and other charges applicable to that card. Even though all credit cards work in the same way, they differ a lot in terms of the benefits and rewards they offer. So, to make it easier for you to understand the basic credit card terminology and choose the best one, here is a quick guide for you.
Annual Fee
Card companies may charge annual fees on credit cards. This might range from a few hundred to a few thousand depending on the benefits you can avail yourself of on the card. However, certain providers may waive the fee for the first year, while others, may offer credit cards that are free for a lifetime. So, depending upon the kind of benefits you seek, you may choose a lifetime free credit card or a card that has an annual fee but may waive it off on spending a certain amount.
Credit Limit
This is the overall spending limit or credit line provided by the card issuer. There are several criteria such as your credit score, income, repayment history, as well as the length of your relationship with the bank that determines your credit card limit. Banks may sometimes offer you higher limits if you already have high limits on your existing cards along with a strong repayment history.
Additionally, when checking your credit card limit, there are further three terms that you must be aware of Total Credit Limit and Available Credit Limit.
Total Credit Limit: This is the credit limit granted by the bank when the card is issued. The total limit can also be increased when you request for the same or if you accept a limit increase offered by the provider.
Available Credit Limit: This is the credit limit that is available on one's credit card at any one moment. In other terms, the available credit limit is the difference between the entire credit limit and the card's current outstanding balance.
Cash Limit: Card issuers also offer a certain portion of your total credit limit as cash limit. This defines the amount of cash you can withdraw using your credit card. However, cash withdrawal from credit cards should be the last resort as cash withdrawal is not eligible for the interest-free period and even a small amount can escalate to a huge debt.
Billing Cycle
The billing cycle refers to the period between the closing of the previous statement and the new statement date. Your credit card provider compiles your statement at the end of your billing cycle, and you have until the due date to make the payment.
Due Date
This is the specified monthly date by which all outstanding payments must be made. To avoid late payment penalties and high-interest charges on unpaid dues, you must make the payment on or before the due date.
Total Amount Due And Minimum Amount Due
At the end of each billing cycle, a new statement is generated and it shows the dues that you owe on your card. Total amount due, as the name suggests, is the total sum that you owe to the issuer, and on making full payment, no charges will be applicable.
However, if you cannot afford to pay the total due, card providers give you the option to pay the minimum amount due to keep your card active and avoid late payment charges. It is usually 5% of the total due and also includes any active EMIs, additional fees, charges, etc. An important thing to note is that on making only the minimum payment, the rest of the outstanding balance starts attracting finance charges and new transactions become ineligible for the interest-free period as well. This is why you should always pay the total due and not just the minimum amount.
Finance Charges And APR
Interest rates on credit card balances are known as finance charges and APR is the annual percentage of interest. It is the rate of interest on all transactions from the date of the transaction until the cardholder's balance is paid back in full. Note that interest on credit cards is compounded on a daily basis.
Being acquainted with these terms will ensure judicious use of the card and help you stay out of debt.
Additionals:
Abdul Aziz Mondol is a professional blogger who is having a colossal interest in writing blogs and other jones of calligraphies. In terms of his professional commitments, he loves to share content related to business, finance, technology, and the gaming niche.
Have you been practicing law for a while? Today, many lawyers are stepping into the entrepreneurship world to open their law firms. Indeed, practicing under experienced lawyers gives a lot of exposure but having autonomy at work is equally vital. You can choose clients and legal cases of your choice and practice in a particular area. Likewise, you can enjoy flexibility and freedom, make decisions, and set your priorities.
However, most lawyers don’t understand that starting a law firm is more than practicing law. Apart from legal responsibilities, you have to recruit people, market the law firm, and most importantly, manage finances. You have to document a long-term financial strategy to stay on top of your daily budget and earn profits. At the same time, you have to manage taxes, acquire funding, handle invoices, and much more.
To help you get started, here is a comprehensive guide to law firm finance in 2021.
1. Create a Long-Term Financial Strategy:
As a law firm owner, you have to establish a vision for the firm’s future. Do you picture a multi-lawyer firm handing corporate clients? Or you want to step into litigation or criminal law? Having a clear idea of long-term goals will help in creating a well-defined financial strategy. You can start putting funds aside for expansion from the beginning.
Likewise, you have to keep up with numbers, forecasts, and budgets to manage the day-to-day cash flow. You have to ensure the business has enough funds to secure new clients and take cases to trial. After all, not every case settles. However, if you don’t have a knack for numbers, consider learning the ropes.
You can look for virtual programs such as MSF online to avoid the hassle of traveling to college. After all, online education gives students a lot of flexibility, motivating them to keep learning. As for your law firm, it will help in managing finances efficiently while practicing law.
2. Get Access to Funding:
Although you are stepping into a service business, you will need a hefty amount of capital and cash to start a law firm. From office rentals, conference rooms, stationary costs to staffing – you will come across a long list of expenses. Therefore, look for ways to obtain capital for your law firm. Here are some of the options you can explore.
Savings:
Whenever starting a business, make sure a small chunk of the capital comes from personal savings. That way, you will keep working in the game because you won’t be liable to another person when things get tough.
Bank Loan:
You can start with a few thousand dollars, but more capital gives lawyers enough runway to make the business profitable. Hence, if your savings don’t seem sufficient, opt for a bank loan or open a credit line to raise capital.
Startup Incubators:
Today, many incubators connect new business owners with funding to get going. Often, they use their contacts with angel investors to fund new businesses or seek help from venture capitalists.
3. Manage Taxes:
Most attorneys operating law firms aren’t aware of legal obligations. As a result, taxes hit them in surprising ways. You might get a call from Internal Revenue System (IRS) or a hefty fine for missing the deadline.
Similarly, many lawyers have difficulty categorizing deductibles. You might think everything is deductible, whereas your tax liability is higher than you predicted. These pitfalls not only halt business operations but are super pricey too.
Hence, consider bringing an experienced tax specialist on board. However, if you don’t have a budget for additional hiring, learn about the taxation policies yourself. It doesn’t mean you have to go back to school; instead, look for online programs. You can opt for an online LLM tax program and learn from the comfort of your home and office. It will help you plan for tax liability, closing doors for IRS audit, and incorrect tax deductions.
4. Streamline Invoicing & Payment System:
Usually, lawyers have different payment policies. When dealing with corporate clients, they charge a monthly fee and have separate legal charges for cases. On the other hand, they don’t charge when fighting for accident victims until the negligent party’s proven guilty. Despite having different payment policies, you must have an appropriate invoicing and payment system at the firm. You can leverage savvy software to automate the firm’s finances.
Moreover, record your income correctly. If you charge a retainer fee, treat it as an advance payment and track its spending on every case. Similarly, avoid recording any income in your financials until you have won the case. It will give you a realistic view of the firm’s financial position, making sure you are on the right track. Besides this, don’t forget to set flexible billing terms with the clients and discuss everything upfront to avoid issues later.
5. Prepare Budgets, Reports, & KPIs:
Having a budget is imperative for your law firm’s financial success. You have to estimate your expenses and the revenue you expect to earn. It will give you a solid idea of how much you should work to make the business profitable. Likewise, you have to prepare financials to catch a glimpse of profitability.
Well, to begin effective financial reporting, you have to start with the bookkeeping basics. You have to record all financial transactions and maintain a separate account for every client.
After this, you can prepare an income statement and balance sheet to determine the law firm’s equity. Also, create a cash flow statement to understand how much cash goes out and comes into the business. All these financials will be a brilliant source of insights about your law firm. You can spot trends, overcome weaknesses, and capitalize on your strengths to make the business more profitable.
Final Thoughts:
Every successful law firm considers numbers and data first. You have to create an excellent financial plan with a growth vision to make your law firm successful. Similarly, you have to manage cash flow, follow a detailed billing process, and raise sufficient capital. As you progress forward, a strong financial position will unfold new growth opportunities. You can tap into new practice areas, offer more services, and expand your team.
Read Also:
How To Choose A Practice Management Software For Your Law Firm
How Do Law Firms Help Companies with Their Real Estate Issues?
The COVID-19 pandemic has caused unforeseen hardships to a lot of entrepreneurs in Malaysia who launched their enterprises in the last couple of years. No one could have estimated the amount of damage to the economy the pandemic would cause or the length of time it would take to recover. The sign of a government loan is like fresh air in the business world, which swift away all your investment-related headaches.
However, there are government loans that you can apply for to help ensure your business survives and has a chance to prosper once the coronavirus has been conquered.
3 Tips For Applying For The Government Loans
The government loans strategy is more robust and well revised. You may be thinking of applying for the loan, but your business is not a big one. You think the government is not willing to lend money to your business. But it is possible.
Here are three easy tips for applying for a government loan.
1. Promoting The Small And Medium Enterprises
These government loan schemes are targeted to help the most financially vulnerable businesses, which are small and medium enterprises (SMEs). SMEs are typically started by well-intentioned but underfunded people who want to put their particular skill-set to use. They might be launched with only a few employees.
Still, by careful management and conservation of their assets, they can grow to make a significant contribution to the state of Malaysia’s economy. The government loan schemes target businesses applying for lower loan totals than a giant corporation would need.
With the world beginning to see the value in micro-finance and recognize the healthy input of small businesses on a country's economy, the Malaysian government felt that with the effects of the pandemic likely to last for some time, it was the perfect time to offer these loans to the public. The small and the medium enterprises will need significantly less money as the loan, but the success chance is more.
2. Apply Through Existing Financial Institutions
To receive your working capital loan, you apply through an existing financial institution. These are not loans per se but rather government-backed loan guarantees under the Working Capital Guarantee Scheme (WCGS).
You receive the loan through the institution and pay them back directly. The government insures the institution against default. The financial institutes are taking a short period, but as you are now dealing with them, your debt payments period will rise.
Even if you’ve been turned down for a loan by the financial institution because you didn’t qualify under their terms, you can reapply under the terms of the WCGS government loan schemes. Government loans require more guarantees and the assurance of return. When you are applying through the existing financial institute, the process will take a small period for sanctioning.
3. Six Types Of WCGS
The diversity among the business is always present. Therefore, your proposal business planning everything can be different. There are six types of WCGS applying to different people and different kinds of business models. These schemes offer differing amounts of loans as well, so you should choose the scheme to apply for that meets your financial needs.
They each have different qualifications, and you need to read the qualifications of each loan scheme and choose the best one for your situation and business.
WCGS is a loan scheme that offers from 100,000 to 10 million Ringgit.
WCGS-SU is a loan scheme targeting startups that offer from 50,000 to 500,000 Ringgit.
WCGS-B is a loan scheme targeting Bumiputeras that offers from 100,000 to 3 million Ringgit.
WCGS-X is a loan scheme targeting export companies. It offers loans of from 100,000 to 10 million Ringgit.
WCGS-W is a loan scheme targeting Woman-owned businesses. It offers loans of from 100,000 to 1 million Ringgit.
ADGS is a loan scheme targeting companies that engage in automation and digital products and services. It offers from 100,000 to 10 million Ringgit.
To find out more about these government loan scheme’s qualifications, inquire about WCGS schemes with the financial institution that handles your banking.
Conclusion:
Applying for a government loan is making all your hard work easy. Usually, government loans have a low-interest level. The time limit is also going to be more stable. If you follow these tips, you can easily apply for a government loan and start your journey in a more relaxed way.
Read Also:
Benefits of NBFC Business Loans
What Are the Alternatives for Small Business Startup Loans?
Online shopping has been quite popular for some years now. However, 2020 was the year when e-commerce bloomed to its full potential
While it may seem unexpected, e-commerce growth has been a result of the pandemic. Successful drop shippers, Can Mandir examines these situations and discusses the future of dropshipping as well as crypto. Below are the key takeaways from the discussion.
The state of dropshipping in 2020:
The growth of e-commerce was matched by the growth of dropshipping. Consequently, drop shippers were on the better side of things throughout the pandemic. Dropshipping was supported by consumer behavior as well as market changes. Therefore, many dropshipping ventures enjoyed periods of success.
The growth of dropshipping is parallel to the increase in the demand for online sellers. People are adopting new habits of shopping online from which dropshippers are benefitting. Moreover, home deliveries have put dropshippers to the ultimate advantage. Can Mandir stand as the proof of what a drop shipper can attain by utilizing market information and consumer needs?
How to be a successful drop shipper:
Can Mandir has successfully established his dropshipping venture. Thus, he knows exactly what one needs to start their own dropshipping venture. In his interview, he lists some of these requirements.
● The primary requirements described by Can Mandir are smart devices such as phones, laptops, and computers. These devices are a must if you're going to start a dropshipping venture.
● Secondly, you'll need a good internet connection. Since dropshipping is a part of e-commerce and you're dealing with consumers over the web, you need to have a stable internet connection.
● Aside from these monetary requirements, one must have willpower, dedication, and discipline. If you have a passion for selling online, you'll definitely be one step ahead of other newcomers.
● You should also be ready to devote time to the venture, or it won't succeed.
What to avoid while entering the dropshipping domain:
If you're not ready to enter the online selling market, you should take your time. Many people are afraid to begin their journey as a dropshipper which is why Can Mandir considers people's mindset to be the biggest problem. It isn't easy selling online, and it has never been so. Therefore, one shouldn't begin their journey if they aren't sure.
Aside from that, Can Mandir also adds that the mindset of the consumer also serves as a barrier. "There are still many people with an old mindset, who often leave their homes to go to the city center to buy things,” he quotes.
The present and future of crypto:
The presence of crypto seems to be pointing towards the future of crypto. As of today's date, crypto is still not a part of the regular currency dealings. However, it has gained a lot of attention and turned many heads towards itself. The active interest in crypto points towards its future. Mandir states that he is positive about the future of crypto.
Moreover, he believes that future dropshippers will be dealing in cryptocurrency. There are a lot of things that led to his opinion of crypto. One of them being the interest Elon Musk has shown towards crypto. The other being his foresight for future market trends and changes.
The state of e-commerce in the post-pandemic world:
When asked about the future expectations from e-commerce, Mandir quotes, "The e-commerce market will continue to generate the growth of revenue.” So, e-commerce agents can rest easy as the future of e-commerce seems as promising as it's present.
Can Mandir believe that consumers will continue to support e-commerce as it provides consumers with better benefits? It's difficult to change consumer habits which is why e-commerce will keep growing for now.
Read Also:
How To Become A Successful Cryptocurrency Trader In 5 Easy Steps
Approaches for Increasing E-commerce Sales Through Inventory Reports
This is the overall spending limit or credit line provided by the card issuer. There are several criteria such as your credit score, income, repayment history, as well as the length of your relationship with the bank that determines your credit card limit. Banks may sometimes offer you higher limits if you already have high limits on your existing cards along with a strong repayment history.
Additionally, when checking your credit card limit, there are further three terms that you must be aware of Total Credit Limit and Available Credit Limit.
The billing cycle refers to the period between the closing of the previous statement and the new statement date. Your credit card provider compiles your statement at the end of your billing cycle, and you have until the due date to make the payment.
