Finance

Merchant Account Contracts: The Good, the Bad and the Ugly

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Guest post Provided by Charge.com Payment Solutions, Inc. Charge.com a company designed to serve small business merchants that accept credit cards online, while providing low cost and flexible options. Visit the Charge.com website for more information.

When most people hear the word “contract”, be it a cell phone contract or a lease agreement, they shift a little in their seats. Contract sounds like a bad word. Contracts can mean a loss of freedom, and a sneaking suspicion that you’re not the one truly benefitting from it. But there are certain advantages and disadvantages to having a contract with internet merchant accounts.

The Good: Contracts with credit card processing companies do have certain benefits for online merchants. A contract outlines the responsibilities of each party so it is clear and concise.

The Bad: Six month or yearlong contracts are not always in the interest of the merchant. Contracts are made by the merchant service to protect their profits, and rightfully so. But as a merchant you need to make sure that the benefits are in your favor as the merchant if you accept credit cards online.  Be sure if you do choose a contract, to read the fine print, make sure the agent hands you all the pages, and make sure there are no termination fees.

The Ugly: But there are many hassles that come with a contract that you may not want to deal with. For example early termination fees that could come with a contract are a bad sign.  You need flexibility for your merchant services for more freedom and control. You can’t predict everything in the future as a merchant, and sometimes you simply just need to change your mind about how you do your business. Termination fees can cost anywhere from $300 to $1,000. Say goodbye to a month’s worth of leasing, or goodbye to that new investment that could really profit your business or even goodbye to that new desk chair. There is always a cost of doing business, but why make sacrifices that don’t need to be made?

Cash Back Credit Cards

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Because of the increasing popularity of credit card use nowadays, a lot of companies are competing with one another in terms of getting more customers. Because of this, a lot of promotions and schemes have been offered by various credit card companies, and one of them is cash back credit cards. These credit cards reimburse the holder for a certain percentage of their purchases. The cash back credit cards usually offer 0.5% up to 2% rebate from purchases. Some of these cards raise the percentage of rebate up to 5%, which attracted more people.

Cash back credit card rebates can be claimed in many ways. First, you can accumulate the rebates you get and use it to pay your annual fees. Second, the credit card company can write a check for the amount of rebate, and finally, the credit card company can deduct the rebates you have earned in you current billing statement.

Some of the benefits that cash back credit card holders can enjoy are the convenience of not having to pay for annual fees ever again. Another advantage is that you can convert these cash back rewards into other rewards like miles conversion or rewards points conversion, which entitles you to exchange the said points for some gifts. Finally, the cash back credit card is the only credit card which is flexible. Unlike other types of cards like the miles card, and other credit cards, you cannot convert them into cash or points. The cash back credit card is an all-in-one card which gives you the flexibility of having all the benefits of other cards into one credit card.