If you’re a small business owner, chances are you’re always looking for ways to save money. Credit card processing fees can eat into your profits, so it’s important to be aware of them and take steps to avoid them when possible.

There are several fees that can be associated with credit card processing, and some of them are avoidable. Let’s look at what are avoidable credit card processing fees and how to avoid them.

Avoidable Credit Card Processing Fees

When you’re running a business, every penny counts. That’s why it’s important to be aware of the various fees associated with credit card processing so that you can avoid them when possible.

Here are some of the most common fees to look out for:

• Interchange Fees

Interchange fees are charged by the credit card issuer and typically range from 1-3% of the transaction amount. These fees are non-negotiable and are passed on to the merchant by the processor.

Fortunately, there are a few ways you can avoid interchange fees altogether. For example, you can ask your customers to pay by check or ACH transfer instead of a credit card. Or you can use a merchant account that doesn’t charge interchange fees.

• Assessment Fees

Assessment fees are charged by the card associations (Visa, MasterCard, etc.) and typically range from 0.1-0.3% of the transaction amount. Like interchange fees, these charges are passed on to the merchant by the processor.

There are a few ways that you can avoid paying an assessment fee. First, you can ask your credit card processor if they charge an assessment fee. If they do, you can negotiate a lower rate or find a different company that does not charge this type of fee.

Another way to avoid an assessment fee is to use a debit card instead of a credit card. Debit cards do not have the same types of fees associated with them. Finally, you can also use a prepaid card. These cards do not have any fees associated with them and can be used anywhere that accept major credit cards.

• Transaction Fees

Transaction fees are typically charged by the processor and range from $0.10-$0.30 per transaction. These fees can usually be negotiated with your processor, so it’s worth shopping around for a company that charges low transaction fees.

There are a few things you can do to avoid business credit card transaction fees. First, make sure you understand the fee structure of your card. Many cards will charge a flat fee per transaction, while others will charge a percentage of the total purchase price. Knowing which type of fee structure your card has will help you budget for fees and avoid unexpected charges.

Second, be aware of the merchant surcharges that may be added to your bill. Many merchants add a surcharge for credit card use, and these can add up quickly if you’re not careful. Ask the merchant in advance if they charge any additional fees for credit card use, and factor those into your decision about whether to use your card.

Finally, consider using a different payment method if you’re likely to be charged transaction fees. Debit cards, for example, usually don’t have any fees associated with them. You may also be able to find a credit card that doesn’t charge transaction fees, or that offers a lower rate for business use. Paying cash is always an option, of course, but it’s not always convenient.

• Statement Fees

Statement fees are typically charged by the processor and range from $5-$10 per month. Keep your account in good standing. This means making your payments on time and keeping your balance low. If you’re consistently late on payments or have a high balance, your card issuer may be more likely to charge a termination fee.

Finally, if you do get hit with a business credit card termination fee, don’t panic. Many times, these fees are negotiable. If you call your card issuer and explain your situation, they may be willing to waive the fee.

• Monthly Minimum Fee

Some processors charge a monthly minimum fee, which is typically around $25. This means that even if you don’t process any credit card transactions each month, you’ll still be charged the monthly minimum fee.

To avoid these monthly minimum fees, you can take the following steps to avoid them.

• Use your business credit card for all of your business expenses. This way, you’ll always have enough activity to meet the minimum spend requirement.
• If you have multiple cards, make sure to use them all equally. This will help evenly distribute your spending and keep you from having to pay multiple monthly minimum fees.

• Termination Fee

If you decide to switch processors, you may be charged a termination fee by your current processor. These fees can range from $0-$500, so be sure to ask about them before signing up for a new processor. if you’re thinking about closing your account, be sure to contact your issuer first. Some issuers may waive the termination fee if you close the account in a certain way or give them advance notice.

• PCI Compliance Fee

PCI compliance fees are typically charged by the processor and range from $0-$100 per year. These fees are necessary to ensure that your business is compliant with the Payment Card Industry Data Security Standard (PCI DSS).

These fees can add up, and they’re often avoidable. Here are some tips on how to avoid paying PCI compliance fees:

• Make sure you’re using a secure payment processor. There are many payment processors out there that claim to be secure, but not all of them are created equal. Do your research to find a processor that is PCI compliant and doesn’t charge extra for it.
• Use a virtual terminal. A virtual terminal allows you to process credit card payments without having to store or transmit any sensitive data. This means that you don’t have to worry about complying with PCI standards, and you won’t be charged any extra fees.
• Use a point-of-sale system. A point-of-sale system can help you process credit card payments without having to store or transmit any sensitive data. This means that you don’t have to worry about complying with PCI standards, and you won’t be charged any extra fees.
• Keep your software up to date. If you’re using outdated software, it may not be compliant with PCI standards. Make sure you’re using the latest version of your software to avoid any compliance issues.
• Don’t store sensitive data unnecessarily. If you don’t need to store sensitive data, don’t do it. The less data you have, the less you have to worry about protecting it.

Following these tips can help you avoid paying PCI compliance fees. If you have any questions about PCI compliance, be sure to contact a qualified payment processing company. They can help you navigate the complex world of credit card processing and make sure you’re in compliance with all the latest standards.

• Discount Rate

The discount rate is the percentage of each transaction that is paid to the processor. Discount rates typically range from 1.5 to 3.5%.

There are a few things you can do to get a lower discount rate:

• Shop around for the best rates.
• Negotiate with your current provider.
• Ask for a lower rate when you first sign up for service.
• Use a service that offers tiered pricing, so you only pay the lowest rate on qualifying transactions.
• Make sure you understand all the fees associated with your account, so there are no surprises.
• Read the fine print on your contract, so you know exactly what you’re agreeing to.
• Pay your bill on time, every time.
• Keep your account in good standing by using it regularly and keeping your balance low.
• Use a rewards credit card to earn points or cashback on your purchases.
• Use a business credit card that offers discounts on processing fees.

Following these tips can help you avoid paying high credit card processing fees. By getting a lower discount rate, you can keep more of your hard-earned money in your pocket.

• Authorization Fee

An authorization fee is charged by the processor for each credit card transaction that is authorized. These fees typically range from $0.10-$0.30 per transaction. Fortunately, there are a few ways you can avoid these fees.

First, be sure to keep your contact information up to date with your credit card processor. This way, if there’s ever an issue with your account, they’ll be able to reach you right away and resolve the problem.

Second, make sure you understand the terms of your credit card processing agreement. Some processors charge an authorization fee for every transaction, while others only charge this fee if a certain percentage of transactions are declined. By understanding the terms of your agreement, you can avoid paying unnecessary fees.

Finally, if you’re ever in doubt about whether a particular transaction will be authorized, contact your credit card processor before attempting the sale. They’ll be able to tell you whether the transaction will go through and, if not, why not. By taking these simple steps, you can avoid costly credit card authorization fees.

• Chargeback Fee

A chargeback fee is charged by the processor when a customer disputes a charge and requests a refund. These fees typically range from $25-$35 per chargeback. There are a few ways to avoid chargeback fees, including:

• Make sure your customers understand what they’re being charged for. Be clear and concise when describing what your product or service is and how much it costs. If there are any additional fees, such as shipping or handling, be sure to list these as well. This will help prevent customers from disputing charges later on.
• Get authorization for every charge. Before you process a credit card transaction, always get authorization from the cardholder. This can be done by asking for the cardholder’s signature on a receipt or by requiring them to enter their PIN number into a terminal.
• Keep good records. Make sure you keep accurate records of all credit card transactions, including the date, time, and amount of each purchase. This will help you dispute any fraudulent charges that may occur and will also come in handy if a customer disputes a legitimate charge.
• Use a credit card processing service that offers fraud protection. Many credit card processors offer fraud protection services that can help you avoid chargebacks. These services typically involve setting up a fraud prevention system, such as AVS or CVV2, and monitoring your account for suspicious activity.
• Respond quickly to customers’ disputes. If a customer does dispute a charge, be sure to respond quickly and appropriately. The sooner you resolve the dispute, the less likely it is that you’ll be charged a fee.

By following these tips, you can help avoid business credit card chargeback fees and keep more of your hard-earned money in your pocket.

By understanding the various fees associated with credit card processing, you can avoid paying unnecessary charges and save money for your business. If you have some concerns about your credit card processing company and all the fees incurred then maybe it is time to look at another company and other credit card processing options.

At Balanced Processing Partners, we are a top leading credit card processor consultant.  We partner with many companies to help you find the right credit card processing company that will save your business from incurring some of the referenced fees.  If you would like to learn more please call us at (800) 354-6256 or contact us via email at [email protected].