(1) Which credit cards will you accept? Most U.S. banks include MasterCard and VISA in their basic package. Some include Discover/Novus. American Express, Diners Club and Carte Blanche are usually marketed separately. My experience in business-to-business transactions sees American Express cards tipping the scales slightly over MasterCard and VISA, with Discover/Novus a distant third. I've never been asked if I accept Diners Club or Carte Blanche. If you're selling any type of business software, you need American Express merchant status.
(2) Do you want to rent a card swipe machine, or do you want to use PC-based software to transmit your data to the bank? Years ago, bankers seemed much more comfortable with issuing card swipe machines. With a bank-sponsored and -endorsed card swipe box, you have one-stop shopping for resolving anomalies in your account balance. If you use credit card software, you run the risk that the software company and the bank will each blame the other for processing problems, and you'll have more difficulty getting problems solved. Expect to pay a $25 monthly rental for the card swipe box. Software lease prices are roughly the same.
(3) What are the costs? There will be an application fee of about $250, which should include the security deposit on the card swipe box. Make sure your application fee is refundable if they turn you down. Expect to pay about $25 per month (to rent the card swipe machine or to lease the software), plus a percentage of each sale. While it varies by bank, the American Express rate is about 3.75 percent, and the Discover/Novus, MasterCard and VISA rate is about 2.25 percent. To make your life more difficult, the credit card companies post transactions differently: MasterCard and VISA credit your account with the amount of the ticket, and debit your account monthly for fees. Discover/Novus and American Express discount each ticket and credit the discounted amount.
Read your contract carefully. Look out for minimum monthly fees, chargeback fees, voice authorization fees, and processing surcharges.
The biggest cost, though, is the lost opportunity cost that you're paying today. You're losing sales from people who simply won't deal with a company that doesn't welcome credit cards. You're losing sales from people who tell you that they'll mail you their checks, but don't. Sign up for your credit card merchant status today.
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Although the essential purpose of all credit cards is similar, the benefits and uses of credit card products can very greatly from one company and one card to another. Comparing credit cards and selecting the best option is much more complex in today's 'borrow and spend' society. It involves much more than simply deciding to get a credit and searching for the best interest rate available.
The process of comparing credit cards is incrementally greater with the tools and resources available through the expansion of the internet. It is now much easier for consumers to compare credit companies, learn about deceptive credit techniques, and find the best products and rates.
Interest rates are only a piece of the comparison puzzle. There are several different types of credit card products common to the consumer market today. Many companies offer some type of introductory or promotional offer to entice borrowers to their products. These include zero per cent balance transfers and zero per cent introductory purchases for initial periods of time.
Again, since these promotional offers are somewhat common, there are still more specific credit card features to consider when finding the most appropriate product for your needs. Most companies offer products with different benefits and name them gold, platinum, silver, standard, or similar names.
Some cards are intended for regular card users who maintain some balance on their cards. For users who maintain balances month-to-month, a low standard purchase rate is important. Other card users do not maintain balances over time and do not keep balances past their grace period. These users do not benefit greatly from a much lower rate, so they prefer other perks. Credit card reward programs are designed to offer incentives for regular balance payers to make purchases. Eventually, the card company would prefer the user maintain some balance in order to recoup interest payments.
The key with getting the right credit card product is to carefully compare credit cards. This is easy to do with online brokers and credit card sites. Consumers can complete questionnaires that explore their spending habits and credit card goals. This allows search programs to pull together the right card products for consideration. Much of the details that make a credit card the best choice for a given consumer are found in the fine print. Length and impact of promotional terms is vital. Long-term goals with the card also offer direction when reviewing the details of a card's benefits and costs.
Both Jack C & Michael D. Strauss are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Michael D. Strauss has sinced written about articles on various topics from Credit Cards, A Secured Loan and Finances. Michael writes for Cardsense where you can as well as the. Michael D. Strauss's top article generates over 165000 views. to your Favourites.