Cash or credit?

Moderated by Rick Badie

In 2013, Georgia was the nations’ 11th-largest exporting state, based on the dollar value of its products. An economic development official writes about the significance of our state’s export market and announces a new trade representative for Colombia. Meanwhile, a consumer expert examines the notion of cash-only purchases in light of recent credit card breaches at major retailers.

Georgia exports grow

By Kathe Falls

International trade is vital to maintaining and increasing jobs and investment in Georgia. Exports create twice as many jobs as domestic trade. For every job created in making a product, another is created getting the product to an international market. In fact, more than one-fifth of manufacturing workers in Georgia depend on exports for their jobs. When looking at imports and exports, more than 300,000 jobs can be attributed to international trade and our ports.

The Georgia Department of Economic Development’s International Trade Division works zealously to encourage export promotion. Still, it isn’t enough to simply work from within Georgia to promote exports outside our state. That’s why we now have international trade representatives in eleven markets that cover 37 countries who seek business opportunities for our state.

Each year we evaluate our international trade contractors by looking at their performance as well as ensuring the location of the contracts is appropriate. We also consider external factors such as countries in which the U.S. has Free Trade Agreements as they help reduce and eliminate tariffs on U.S. goods in these markets.

The U.S. has five trade agreements in the Americas that cover eleven countries: NAFTA (Mexico, Canada), CAFTA-DR (Nicaragua, El Salvador, Guatemala, Honduras, Dominican Republic, Costa Rica,) Peru, Panama, and Colombia. Georgia companies are taking advantage of these agreements. In 2013, approximately 36 percent of Georgia’s exports were to the Americas. Generally speaking, this region is highly receptive to U.S. products and services.

Recently, we announced new international trade representatives that cover Mexico and Colombia, making Georgia the first state to have full-time trade representation in Colombia. This team expands Georgia’s representation in the Americas from Canada, Mexico, Chile and Brazil. Georgia also has representatives in Europe (based in Germany), the United Kingdom and Ireland, Israel, Korea, Japan and China.

Based on an increased demand for export assistance in the Americans, the state looked at expanding its Mexico contract to include Mexico plus another free trade agreement country. While many strong opportunities were identified with Panama, Peru and Colombia, Colombia was selected as the best match for Georgia. Colombia is currently Georgia’s second-largest South American export market and third-largest Latin American export market. Having increased exposure in Latin America provides more opportunities for Georgia companies. Even more so, we were able to accomplish this without increasing costs to the state.

I’m proud to work for a state that has broken its export record for the fourth consecutive year. Last fiscal year, our international trade division assisted 1,346 companies to access markets outside the U.S. In 2013, Georgia’s value of exported goods totaled $37.6 billion, the most the state has ever exported within a single year. Georgia ranks as the nations’ 11th largest exporting state, based on dollar value of exports. Georgia is well-poised to remain competitive in the global marketplace with the help of opportunities from the state’s new international markets.

Kathe Falls is director of the international trade division for the Georgia Department of Economic Development.

Cash or credit?

By Adam Levin

After hackers breached computer systems at Target, Neiman Marcus, Michael’s and the hotel management chain White Lodging and stole millions of Americans’ credit card numbers, many people wondered if they should stop using credit cards and start using cash.

The question everyone should ask themselves, though, is why they started using credit cards in the first place, and whether those reasons are valid today.

There are many upsides to using credit cards, first of which is sheer convenience: fewer trips to the bank, little need to have the exact amount in your bank account at the moment of purchase, no change to count and no need to figure out what to do with those pesky pennies.

For many, the convenience of not needing cash for daily purchases can cut both ways: Acquisition ecstasy can trump reality (at least until the bill comes). There’s the temptation to spend more than you should or more than you have.

Most cash-versus-credit arguments illustrate these trade-offs. Avoiding credit cards makes you less vulnerable to identity thieves targeting retailers, but carrying cash makes you more vulnerable to burglars and pickpockets with none of the fraud protections offered by most banks and credit card companies. Once your cash is in someone else’s pocket, it’s gone.

While you might feel uncomfortable at the thought thieves could potentially access your credit, it’s hard to imagine that anyone feels comfortable enough to walk into Best Buy with enough cash to buy a TV.

Using cash exclusively means you won’t ruin your credit by racking up bills you can’t pay (or can’t pay on time), but it also means you put yourself at risk for having no credit report at all, which for many lenders is akin to a bad score.

Furthermore, as those of us who have already broken our New Year’s resolutions know, changing daily habits takes a lot more than just the desire to change. Switching from one extreme (paying for everything with credit cards) to the other (paying for everything with cash) is the sort of change anyone would find hard to maintain. Like most things, try it in moderation.

If you want to start using cash more often because you want to improve your credit score or pay down debt, don’t go cold turkey on your cards. Set up a few monthly bills to auto pay so you don’t lose access to existing credit. Leave your cards at home except when you’re making a big purchase. Use cash for those everyday expenses or skip them entirely.

But if you’re thinking about switching to cash because you’re worried about identity theft, try this: Take five minutes each day to check your bank and credit card accounts online (using a secure Internet connection) to make sure every transaction you see is yours, and monitor your credit for unexpected changes.

Adam Levin is chairman and co-founder of Credit.com.

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