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Joe Weppler / May 27, 2020

Credit Card Companies Are Cutting Credit Limits Due to COVID-19 Concerns

According to a report from CompareCards.com, nearly 50 million cardholders had their credit limits involuntarily reduced or even had a card closed by their issuer in April. The same survey found that 3 in 10 cardholders are using credit cards “more than ever” since the onset of the coronavirus pandemic. 

Considering the impact that COVID-19 has had on the economy, it’s no big surprise to see banks reduce their lending. In uncertain economic times, banks get nervous at the prospect of their borrowers running into unexpected financial circumstances. The precedent was set in 2008, just before the Great Recession, when economic uncertainty led to banks slashing credit limits and tightening credit standards. 

Unfortunately, these cuts can have a negative impact on your credit score by increasing the overall percentage of your credit in use. For example, if you have a credit limit of $20,000 across two credit cards, and you’re currently using a balance of $4,000, you’re using 20% of your credit — keeping within the suggested utilization rate of no more than 20% to 30%. 

In this same scenario, if your credit card limit is suddenly slashed to $10,000, you’re now using 40% of your available credit without ever having borrowed more or missed a payment. That change is going to negatively impact your credit score at no fault of your own. In fact, your utilization rate is the second-largest factor in determining your credit score — second only to your payment history. 

While there’s no way for a consumer to guarantee that a bank won’t reduce their credit card limit or close their account altogether, here are a few ways that you can mitigate the risk: 

Actively maintain your credit score: Continue to pay your bills on time and keep your utilization rate below 20-30%. By avoiding late payments and high utilization rates, your credit limit will naturally grow over time. 

Keep your cards active: If you have multiple cards, make sure you don’t let any of them become inactive for too long. Inactivity is one of the most common reasons you might see your credit card limit lowered. Your credit card limit is not set in stone when you receive you card — sudden drops in your credit score can lead to your issuer lowering your limit. This can be as simple as making a single purchase on your lesser used cards every few months before hiding them away again. 

Move recurring payments to an inactive card: One great way to keep your less-used cards active is to use them for small, recurring payments like subscriptions to streaming services, food delivery plans and monthly bills. Most recurring services have auto-pay options that can be used as a set-and-forget method of keeping your card active. 

Ask for a limit increase: While this may sound redundant, one method of countering the effects that a credit card limit slash might have on your credit score is by seeking a limit increase on another card. This can help maintain your utilization rate and mitigate a dip in your score. Issuers are less likely to approve an increase in your limit now — but it’s worth asking.

Reach out to your card issuer: Speaking of asking — if your credit card limit is reduced or your account is closed — reach out to your card issuer. If you can show them that you’re still employed, maintain a steady income and that you’ve been a valuable customer, you may be able to have the decision to lower your limit appealed. Often, these decisions are made by a computer program and can be reversed with human intervention.

If you’re struggling to pay your credit card bills, many credit card issuers are currently allowing their customers to opt into relief programs online. These financial hardship programs usually offer cardholders both short-term and long-term payment plans in exchange for immediate relief from their credit card bills.

Joe Weppler / May 22, 2020

How Are Telecom Operators Coping With Increased Traffic?

Rogers Communications Inc. recently told a House of Commons committee that home internet usage is up more than 50 percent compared to before the coronavirus pandemic. Voice call usage on the Rogers wireless network is up 40 percent, and 1-800 toll-free calls are up more than 300 percent. Rogers customers alone are making more than 50 million wireless voice calls per day.

According to Akamai, a tech company that monitors web defenses, global internet traffic has increased by as much as 30 percent since mid-March. That’s almost an entire year’s worth of internet traffic growth in just a few short weeks. It’s important to note that this growth was experienced even with the loss of live sports streaming, which normally accounts for significant global traffic.

When it comes to mobile data consumption, the trends are unsurprisingly similar — especially in areas with heavy lockdowns such as Spain and Italy. Italy — the first European country to go on lockdown — saw peak usage increase by nearly 90 percent.

So how are telecom operators and content owners across the world stepping up to address the impacts of such significant traffic surges?

Telcos everywhere have worked closely with their respective governments to provide increased internet services to the public to help manage the crisis. Engineers are working around the clock adding additional fibre-optic connections and servers to those invaluable central offices that house and reroute customer data.

Video game companies like Sony and Microsoft are bottle-necking peak-hour downloads to help combat the congestion. Massive video streaming platforms like Youtube, Amazon and Netflix have adjusted their encoding rates, sacrificing video quality to help reduce the strain on telecom operators. This is especially pertinent, as major video streaming platforms are reporting massive increases in usage as people spend more time on the couch. The television industry as a whole saw a 20 percent increase in viewership in mid-March, and Amazon’s live streaming platform Twitch saw its total amount of hours watched jump from 33 million on March 8th to 43 million on March 22nd.

In the U.S., the Federal Communications Commission has granted temporary access to normally reserved mobile spectrum bands to provide additional broadband capacity. Similar steps are being taken across the planet, from Ireland to Brazil.

AT&T has waived data overage fees in the United States. Vodacom in South Africa has invested $24 million to add network capacity to support remote workers. In Canada, Bell accelerated the rollout of its new wireless home internet service in rural areas. In Wuhan, the original epicenter of the coronavirus virus, China’s three major telecom carriers have set up 5G stations for health care workers in city hospitals.

Businesses everywhere are experiencing unprecedented circumstances, and they have all had to adapt — whether to growth or loss — due to the pandemic. In these strange times, it’s comforting to see the international effort put towards keeping humanity connected.

Joe Weppler / May 15, 2020

The Benefits of Electronic Logging Devices

In the United States, the Federal Motor Carrier Safety Administration mandated in late 2017 that most commercial vehicles over 10,000 pounds be installed with electronic logging devices. This is to enforce hours-of-service rules for truckers in order to help prevent crashes and injuries. North of the border, a similar mandate (with a few key differences) from Transport Canada comes into effect in June 2021.

If you’re involved in trucking you likely know what an electronic logging device (ELD) is, but for those unfamiliar, an ELD is a certified device that automatically logs a driver’s hours of service electronically. The ELD is able to automatically detect when a driver begins and ends a trip including time spent taking breaks. Beyond governmental compliance, there are several great benefits to installing ELDs in your fleet. Let’s take a look at some below.

1: More Road Time for Drivers

According to estimates by the FMCSA, drivers spend over 20 hours a year simply filling out their paper logs. ELDs not only reduce paperwork time for drivers and filing time for their carriers, but also reduce time spent on checking up on driver hours.

Plus, ELDs can significantly cut down on the time a driver spends in an inspection, because their hours are clearly readable for an officer and drivers won’t have to spend time digging through their paper logs to find violations or correct errors.

2: Added Value-Functions

ELDs don’t just log driver hours — they can come with plenty of value-adds that can save you time and headaches.

  • Driver-Vehicle Inspection Reports completed through an in-cab tablet before each trip to reduce time and increase accuracy
  • Driver behavior tracking to encourage good driving habits and increase the safety of both truck drivers and regular passenger vehicle drivers on the road
  • Fleet management capabilities such as automatic fuel tax reporting
  • Fuel efficiency monitoring to identify trends and save organizations money on one of the biggest expenses a fleet incurs

Not all add-ons will be useful for every fleet, so make sure you do your research and pick the ELD system that works best for your business.

3: Better Route Management and Live Location Tracking

ELDs allow fleet managers to track their trucks via GPS, giving them real-time locations of their drivers. That means fewer distracting calls to drivers asking for updates, increasing productivity of both the manager and driver. Plus, GPS tracking can help both managers and drivers refine and optimize their routes to make them as fuel efficient as possible.

4: Liability Reduction

Accidents happen on the road, which means even the safest driver could find themselves in a wreck. For companies with many drivers logging many hours on the road, lawsuits are an inevitability.

ELDs can help strengthen a truck driver’s case in instances where they aren’t at fault. The data recorded by the ELD can be used as evidence in court, and could be the difference between winning a lawsuit or paying out a hefty penalty through no fault of their own.

5: Road Safety and Insurance Costs

According to the FMCSA, ELDs save over 25 lives and prevent hundreds of injuries every single year. Plus, with vehicle and hour monitoring, ELD helps prevent even more accidents caused by driver fatigue or mechanical failure.

An added benefit to carriers is that with increased safety comes decreased insurance premiums. Fleets with ELDs installed should see their insurance costs drop as ELDs have been proven to increase fleet safety. Plus, with GPS tracking, the risk of stolen vehicles drops dramatically.

Schooley Mitchell are experts in electronic logging devices and fleet tracking, and we can examine your entire system to recommend the configuration that’s right for your business. If you’re outfitting your fleet with ELDs, contact us today to make sure you’re getting the right service for your business at the best price available — completely risk-free.

Joe Weppler / May 8, 2020

Are Electronic Signatures the Next Step for Your Business?

Offices across the world have been trending digital for years now — and with the current coronavirus pandemic, people are even less inclined than ever to deal in physical documents. In the fast-paced business landscape, the convenience of computer screens and mobile devices have increasingly pushed paper to the wayside.

So what are electronic signatures, and are they right for your business?

According to one definition, an electronic signature refers to “data in electronic form, which is logically associated with other data in electronic form and which is used by the signatory to sign. This type of signature provides the same legal standing as a handwritten signature as long as it adheres to the requirements of the specific regulation under which it was created.”

In a paper for MIT written by David Fillingham in 1997, he outlined that the application of signatures, either handwritten or digital, was to achieve three main security services:

Authentication: A signature proves the signers identity.

The most obvious example being the signature on the back of a credit card indicating who the owner is, or on a check to indicate where the money is coming from.

Data integrity: A signature is assurance that the data of the document has not been modified since the signature was applied.

While a traditional signature itself does not provide data integrity, things like indelible ink and tamper-proof paper provide some measure of security. Digital signatures take this aspect a step further, since any modification of a digitally signed document will always result in verification failure.

Non-repudiation: A signature prevents the signatory from denying involvement in an agreement.

Providing evidence to a third-party that a signatory participated in a transaction or other type of agreement protects the parties within the agreement against false denials of participation. For example, a customer’s signature on a receipt from a credit card transaction protects the store and card-issuing bank from false chargebacks.

The objective of an electronic signature is to quickly and efficiently authenticate a digital document without the use of pen and paper. Electronic signatures are much quicker than the traditional electronic method of sign-and-scan, and according to a 2013 research study on signing productivity in high-volume environments such as sales, finance and human relations, replacing traditional methods with electronic signatures saves an average of $20 per document.

Plus, by using electronic signatures to authenticate your documents, you help to eliminate the opportunity for fraud. This leads to a considerably more secure process for documents than even pen-and-paper based signing. Electronic signature platforms also benefit from increased oversight, allowing you to centralize and monitor the signing process.

To recap — electronic signatures will help your business cut down on paper, postage and printing, save your business significant time and money, reduce overall turnaround times, protect your business from non-repudiation and provide increased security through better oversight and improved data-integrity.

If you’re interested in finding an appropriate electronic signature service for your business, Schooley Mitchell can make sure you find the right service at the best possible price. Reach out today for your risk-free consultation.

Joe Weppler / May 1, 2020

Contactless Payments Can Keep You Safe – and They’re Here to Stay

Do you wonder how many infections could be stopped if we kept our cards — and our germs — to ourselves? According to a study conducted by finance site LendEDU, debit and credit cards are dirtier than cash and coins. In fact, the sanitation monitoring device used to calculate their “germ score” by measuring the number of bacteria on a particular surface found that our payment cards beat out public train station bathrooms! For obvious reasons, contactless payments are an excellent alternative!

Are you new to contactless payments? Trust us — you’re not alone. Mastercard reported a 40% increase in contactless payments in the first quarter of 2020 as the global coronavirus pandemic worsened. The trend is being driven by consumers looking for quick ways to get in and out of stores without touching anything. Mastercard also thinks the contactless payment trend will continue well after the pandemic.

Most of us carry our smartphones with us everywhere we go, and we’re sanitizing them frequently as advised by medical professionals across the world. Thankfully, if you carry your smartphone, that also means you likely carry Apple or Samsung Wallet with you too. By using contactless payments, we avoid exposing our physical payment cards to droplets at one cashier counter, and the next, and the next. Plus, we avoid having to touch the physical terminal at all to punch in our PIN.

Unsure if this form of payment would be offered where you shop? Keep your eyes peeled for the Contactless Payment symbol — similar in appearance to a WIFI symbol turned on its side. Look for this symbol the next time you visit your favorite restaurant or retailer or ask an employee if you’re unsure. You might be surprised just how many places now offer contactless payment. Hold your phone out the window at the drive-through or curbside pick-up now, and after the pandemic has been quelled, keep using it to avoid contact with machines where other cards have been dipped or swiped.

In case you’re worried about transaction security — contactless transactions leverage near field communication (NFC) technology to establish a wireless connection with the cashier’s terminal. Linking credit cards to smartphones makes it much harder to steal a user’s payment information for several reasons.

  • The smartphone must be unlocked first
  • The correct payment app must be open
  • The phone must be very close to the terminal

Payments made through card-connected mobile devices or other wearable technologies benefit from the most fraud protection. Your physical card number is not saved in your smartphone wallet. Instead, a device account number is created for your card on your particular device. This number is separate and unique to your phone and different from your physical card number. Because legacy, contactless, and EMV (chip) credit cards can all be linked to NFC-enabled devices, this technology is not only secure but also the best in-person payment method to reduce the spread of a virus.

One thing to note is that merchant services processors categorize their payments by “card-present” and “card-not-present” when analyzing the risk of the payment. While the terms seem self-explanatory, a transaction is considered “card-present” only if electronic data is captured at the time of the sale. That means that hovering your phone above a contactless-enabled terminal constitutes a card-present transaction — meaning the store saves on processing costs compared to an order taken over the phone, on a website, or using electronic invoicing!

 

This week’s blog was written by Schooley Mitchell Strategic-Partner Jill Lowry. You can visit her at www.schooleymitchell.com/jlowry for a free consultation if you’re interested in setting up contactless payment for your business or reducing your various business expenses.