Learning how to Save on Credit Card Processing Fees

Let's say that you run a retail business selling computers. One day, you get a call from a salesman; he wants you to switch credit card processors. Go with it, he says, and you will have a free credit card processing terminal, a low discount rate, and very low administrative fees. You really hate those credit card processing fees; so you think to yourself that this could be a great offer. You sign up, and you watch closely to see how all the savings add up. Usually, the discount rate, which is what you have to pay the credit card company and credit card processing fees for each swipe, is officially 2%. But there are all kinds of complexities involved in the matter; usually, retailers find that their actual fees come to 5%. After about two months, the jig is up - the new people charge no less than the old people. You know that you've been had.

The problem is that understanding a contract for credit card processing fees can be a terrible task. It's like asking you to read your health care plan and understand the fine print. Any vendor can quote you very encouraging-sounding prices; but those will be special case prices that you can never take advantage of in real life. For instance, if a customer actually takes out an ordinary credit card and swipes it, that could qualify for the low rate. If there is no physical card and someone has to key in the number, or if a customer shows up with the government or business credit card, your processing fees go up.

And that isn't even it. For a credit card sale that you get to make, you need to pay something called transaction fees to the processor. It's about 30 cents for every sale. And of course, you have to have an Internet presence and credit card processing ability over the Internet. The payment gateway fee is another monthly drain on your resources. And then for debit card sales, there is the debit transaction fee, there are chargeback fees, address verification service transaction fees, termination fees and monthly fees. It's enough to put anyone off the whole thought of starting a business in the first place. Some processors are transparent upfront about all of this; others try to make their money by getting you completely confused. Basically, unless you have the mind of a corporate lawyer, there is really no way you can compare one offer with another.

The best way to make your way through all of this is as usual to learn enough about everything. You need to read up enough about the whole business so that you understand the terminology the business uses. Ask to see the fee schedule and sit down and evaluate it properly. Make sure that you don't sign a long-term contract; and be sure that whatever you do, you don't go with an unreliable operator just a pinch a few pennies.

Finding Out what the Best Credit Card Deal Is

If the credit card companies, when they put out their best credit card deals, really do wish for people to take advantage of them, wouldn't they make them easier to understand and not as unnecessarily complicated as they usually are? That's just a hurdle they place in your way, apparently, to make the hunt a bit more interesting. The rewards and points that you get, in general, you're allowed to redeem for stuff you can buy shopping, booking hotel rooms or buying travel tickets. Still, the credit card companies have practically no agreement over what kinds of terms and restrictions they should impose on how you redeem those points. As far as the credit card companies are concerned, apparently, the nonstandard rules and restrictions make things more fun for you. For instance, if you have a credit card that's co-branded with an airline or hotel, they give you more bonus points. But for the privilege, you have to pay a large annual fee. Before you can rejoice over the kinds of rewards you stand to get with any card, you do have to calculate if you end up getting enough rewards that the annual fee should be worth it. Travel rewards cards like the Capital One Venture have fewer rewards and no annual fee. It's enough to make tear your hair out finding out which the best credit card deals are.

Unless you have special behaviors to do with how you buy your travel needs, there's really no difference between one travel card and the next for most users. These programs only make financial sense if you happen to be a real frequent flyer or if you shop a lot. If you fly often and on a specific airline all the time, for instance, getting an airline co-branded product would make a lot of sense. If you happen to shop a lot, you'll find that shopping rewards cards don't lock you into any one airline or hotel chain. You can redeem them for any kind of travel need, usually, with any kind of vendor. In general, whatever kind of rewards program you choose, you'll need to travel least on six flights every year for it to actually pay.

Let's say that you are a prolific traveler. Picking up a United Mileage Plus Visa card may make a lot of sense. They have rewards programs with hundreds of stores, pharmacies, and hotels in addition to traveling on United Airlines. American has a program like this too. Still, the best credit card deal, if you are interested in rewards, may come not from the airline co-branded products but from the hotel products. These cards usually don't carry a fee. And redeeming your rewards can be much easier. A hotel rewards card happens often to be far more rewarding.

Perhaps the best credit card deals are in the travel credit cards market. Products like to Chase Sapphire card allow you to migrate your points between categories or even get cash back. And when you try to get a free airline seat, the card company actually buys a seat for you. Getting a free seat this way is nothing like it is with redeeming airline miles. There are no special seats set aside for you. This can make life a whole lot easier. So what if you earn fewer points? You have a far better time redeeming them.