Sign up without confusion
Credit card companies charge for the services rendered in so many ways. Sometimes, these charges appear to be sham though sometimes sensible adding value to the users. But, a monthly credit card statement of transaction containing various names of charges may annoy the merchants. Sound knowledge of charges applicable on credit card transactions help the users to accept without any hassles. Frequent entries of fee can be judged before making payment.
Credit card processing usually includes the following types of fee.
Application Fee
Unlike reputed credit card companies, some of the ordinary companies charge application fee unnecessarily. Since the reputed companies make voluminous profit by processing large number of credit cards transactions, they do not levy application fee for the users.
Start up fee
To set up the account into motion, start up fee is charged for initial processing. The reasonable start up fee is considered to be $25 worth spending for the set up if it works well.
Statement fee
Cost of stationery and stamping for each monthly billing of credit card transaction is included in the statement fee, which in turn help the users to understand the analysis of expenditure made on the credit cards. The statement includes details of transactions processed during the period, number of swipes with date and time, with a charge of $7-$10 for each statement. The information provided in the statement helps the users to understand the nature of expenses made on the credit card transactions for each billing cycle.
Monthly Minimum Fee
The very aim of credit card companies is to make profit all times and to operate their system successfully and constantly. For this reason, even to face the dry spells, the credit card companies generate revenue by levying a fixed monthly minimum fee on the credit cards. The same is specified in the contract also. The credit card companies fix a certain percentage for each transaction value. In case the value falls short of minimum fee, the amount can be collected from the overall business.
Discount Rate
A primary fee ranging from 1.5% to 2% per transaction is charged by credit card processing companies i.e. A small percentage of transaction amount. This can be as high as 5% in some contracts.
Charge Back Fee
Occasionally, credit sale is to be returned after purchase on the credit card and the amount is to be refunded. Such requirement will be dealt by the business if the credit sales are frequent. But, a certain limit is fixed to check the count of unlimited charge back fee.
Gateway Fee
Credit card processors provide a system for ecommerce business merchants to verify and accept on-line payments. Ecommerce applications enable business people to sell their products on-line and are liable for gateway fee charged by credit card companies for having web site and a shopping cart etc. Gateway fee generally per month is $10.
Termination Fee
Contractual duration for credit card processing varies from 1-3 years. A fee of $ 200-$300 is chargeable in case of prior termination. Some companies do not charge termination fee but the hidden costs are higher than this fee.
Credit card companies can not survive without charging a fee. They operate business and accumulate profit based on the various fee structure applicable to credit card transactions. However, total fee paid can not exceed more than 2% of total sales of business. By following this concept, a striking balance is maintained between business and credit sales.
Further guidance regarding no annual fee credit and apr credit
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