How To Save Money On Credit Card Processing
Have your monthly “junk” fees reduced or waived
Merchant service providers get much of their revenue on fees in addition to transaction processing charges. Junk fees usually go by many names like a customer service fee or statement fee. Ask your merchant service provider to run through your latest statement. If they ever mention fees, ask what they are for. If it is a junk fee – you should insist that it be reduced or lowered from your account entirely.
Have your annual fees waived
In general, annual fees are comparable to the junk fees explained above, but they may be even more expensive. There is absolutely no reason for your merchant service provider to charge you a merchant account annual fee. Uninformed merchants may be paying expensive annual fees for their merchant accounts without even realizing it as the fees may not appear on their statements.
When you open your merchant account, examine the schedule of fees and scour it carefully for any annual fees. If you don’t receive the schedule of fees, contact the merchant service provider and ask whether they charge annual fees. If you are being charged annual fees – insist that it be lowered or better, waived.
Have your monthly minimums waived
Especially if you deal with a business in seasonal swings, you may have significant expense to your monthly minimums. The monthly minimums are the amount a merchant service provider charges regardless of your current processing volume.
For instance, if a merchant account has a $15 monthly minimum and the processing charge for a given month is only $10 – you would incur an extra $5 charge just to bring the total monthly charge up to the $15 minimum amount. Contacting your provider and asking the fee removed entirely from the merchant account can save you a lot of money after a year without minimum fees.
Clean magnetic strip reader on your credit card machine
Take a few minutes to clean the credit card machine reader as it can save you significantly on monthly processing charges. The credit card magnetic strip holds vital information about a cardholder that your credit card machine scans when the credit card is swiped through the reader.
If you want to get the lowest possible credit card processing rate, your machine must read all of the information from the magnetic strip. Dirty strip reader may prevent accurate data reading and cause corrupted results in some or all entries. The transaction can still be approved; however it will incur a higher interchange rate. Periodically cleaning magnetic card reader may help to prevent overpaying the processing fee.
Credit Card Reviews : Read The Fine Prints
Let’s be honest; the banking industry is not exactly known for being honest and trustworthy. When it comes to credit cards, they’re definitely sneaky with the fine print. Next time you are comparing and contrasting credit card reviews, be sure to pay attention to these things:
Default APR: This is the interest rate they can raise your card to in the event you are classified as a “default” cardholder. Now the definition of that is a slippery slope; being late on payments may cause you to fall under this category. If you always pay on time, then this shouldn’t be a problem. But if you are occasionally late with payment, then check what the default APR is because it may end up affecting you.
Rewards: For most of us, the allure of “free money” in the form of cashback rebates, reward points, or frequent flyer miles is what draws us to credit cards in the first place. Usually they are upfront about how these programs work, but sometimes you have to read the fine print to find out the real deal. For example, there are some cards that give up to 5% cashback on certain categories, but once you read the fine print you discover it’s only on the first $400 spent in that category. After that, it’s only 1% or less cash back.
Grace Period: Thanks to the Credit Card Reform Act of 2009, there is now a minimum grace period of at least 21 days on purchases. Before that, some creditors were only giving you a week or two to get your payment in before interest accrued. 21 days is definitely an improvement from that, but you can do better. Credit card reviews will usually list the grace periods for each card – try and go for those that give you 25 to 30 days instead.
Customer Service: This is one of those things many of us fail to consider before applying. Customer service alone can be the differentiating factor between a bad credit card and a good one. When you call for help, do you want to be greeted by a confusing voice prompt that requires you to press a bunch of numbers and wait on hold twenty minutes before you talk to someone? Or, would you rather have a card that allows you to speak to a real human when you call, without waiting? According to J.D. Power & Associates, when it comes to customer service American Express ranks #1 and Discover ranks #2.