If your export business is performing well in domestic market for some time, you should be thinking of expanding it to the international market. Not only it can provide you with more profits but selling more units will also help in bringing down the cost per unit. Reaching out to global markets can be your way to prosperity which you have been dreaming for. But before you expand your business to outside markets, you must understand that domestic trade is quite simple when compared to international trade, which brings many new factors into play. Exchange rate is probably the most important one, you must understand what is it and how it can disturb your profits before you go through the pricing process. Let’s start with a basic definition.

Exchange rate:

All major countries have their own currencies. When you are selling to these countries, your sellers will be willing to pay in their own currency, while you can demand for a payment in your own currency. The buyer must then go to his bank and have his currency converted. This conversion will be done at foreign exchange rate. Rate of exchange is the value or price of one currency in terms of another currency. Rate of exchange is also a very important factor of the economy, having an impact on country’s overall imports & exports.

Forms of exchange rate:

Two methods are used to determine foreign exchange rate.

i) Floating Exchange rate
ii) Fixed Exchange rate

Floating (or flexible exchange rate), the one widely used in most parts of the world; let the markets decide by means of demand & supply, at which rate the local currency will be converted into other currencies. This type of exchange rate is often fluctuating, and the exporters need to be secure that some dramatic change will not shrink their profits to an undesirable level. Forward exchange rate (estimated exchange rates for some future supply) should be carefully calculated when pricing. Normally exporters come up with a cushion to secure their position in case of sudden change in exchange rate. Fixed exchange rates are decided by regulatory authorities to achieve their economic goals.

Providing the lowest cost possible is vital in international trade, so you cannot shift the whole burden on buyers. Thus, it is necessary that you observe your target market carefully, past fluctuations in its exchange rate and economic stability before you finally decide on prices of your products and services.

A Reward Card is a credit card that comes with a reward program. It’s a strategy to get consumers to use their credit cards over and over again. In order to do this they give you an incentive by earning points which can be redeemed for anything from cash backs to travel points. Before you get enticed into a reward card, you must understand how they work and if they can be effective for you.

The truth about reward cards

Credit cards that have a rewards program may give you a sense of enjoyment. You’re using a card for purchases and you’re receiving extra value, HOWEVER, there may be risk involved. Here are some points to consider before signing up for that reward card:

• Is there an up front fee?
• Some cards carry annual fees which can cost you more than it’s worth.
• Does the card have a high interest rate? If you’re carrying a balance this can also cost you a lot more in the long run.
• Will you earn points only for a limited amount of spending each month?
• Points may not be rewarded when shopping at discount stores or online so you may be paying more for an item when purchasing through a dedicated store through the program.
• Cash back cards may only allow you to redeem if you spend over a certain amount of dollars in a year.
• Your points may expire if you don’t use them or if you miss a monthly payment.
• The card issuer can change the rules at any time.

When can a reward card be effective?

• The reward programs will benefit you if you actually use the rewards. If you never fly, then having a credit card that rewards you with air miles is virtually useless.
• If you receive points for shopping at specific vendors, then make sure that you’re a regular at that vendor.
• Choose a card that you can accumulate points that never expire.
• When you choose a reward credit card that has no up front fees, annual fees or high interest rate then you can simply collect points when you can to possibly redeem them in the future. Sometimes you may receive a free movie pass or a $20 gift certificate to your favourite local restaurant.

It’s also important to remember that most of these cards are reserved for people with the best credit and you may need to repair your credit before getting the best card out there for you. Prudent Financial Services is the leader in loans to people with bad credit histories and their goal is to help you restore your credit.