Credit Card Blog

A bill approved by the U.S. Senate on May 13^th will allow merchants to set minimum and maximum transaction amounts for debit card purchases. Previously, you could buy anything with a debit card, regardless of the amount, and for store owners – if the purchase was small, like a pack of gum, it meant paying more in debit card service fees than the profits made on the purchase. With this bill, merchants will be able to set limits to ensure their profitability on debit card purchases.

MasterCard and Visa have been concerned over credit and debit card regulation for a long time. They are credit and debit card processing networks, and don’t receive all of the interchange fees directly, but their revenues do depend on how much people spend on their cards. If merchants restrict purchases, they fear they will experience large drops in revenues as people will be less likely to use their cards.

MasterCard is determined to fight this bill until it is finalized into law. While the bill isn’t restricting the amount Visa or MasterCard can charge in interchange fees to merchants on credit card purchases, they’re concerned that the regulation on debit transactions will open the door to more regulation in the future.

Reuters reports:

“MasterCard U.S President McWilton said in a speech earlier on Sunday that MasterCard was “very concerned” about the amendment and “working very hard to make sure” that it would not be attached to the final financial regulation bill.”

There is a new application available for the iPhone and the iPad that will make it easier for companies and businesses to process credit cards on the go.  The app is called “Square“. From the mind that brought us Twitter comes this new application, free for the iPhone but it does requires a device that plugs in that will actually “swipe” the credit card. It will have some other features like saving recurring purchases and frequently visited clients or consumers.

The application seems geared to traveling businessmen or any one who may need to process credit card sales on the go. It has great potential for street vendors who previously could only handle cash transactions, direct sales representatives doing home parties, or any other retailer that was primarily cash only (or who had to wait until they returned home with their credit card purchases filled out on paper to enter into their computer-based credit card processing software).

Taxis will now be able to charge for the cab with debit or credit transactions, which may also add to the safety of the drivers, who are all too often targets of robberies.

People trying to make extra money at garage sales and flea markets may still tap in to the potential of the “Square” application, allowing them to sell things to  people who don’t carry cash on them, but have their debit or credit cards.

This is a great application for any one who is in business that would like to expand out of the cash only situation and not be limited to a store front or their computer to process payments. Flea market vendors, street vendors, livery personnel, on the road salesmen and others will see a great use out of this product. The best part is the only investment, if you already have the iPhone or iPad, seems to be the purchase of the plug-in device, as the actual software is free.

Network marketing businesses, also commonly called Multi-level Marketers, have been successful for many decades. Some of the best known are Melaleuca, Amway, Tupperware, Pampered Chef, and Tastefully Simple. The majority of these organizations have websites that are setup to accept credit card purchases, but that’s not so simple when you’re doing a Pampered Chef or Melaleuca Demonstration in-home party. Here are some options to make the process much less of a challenge.

Network Marketing businesses such as Melaleuca, Pampered Chef, Amway, and a majority of others have websites. These websites give consumers the opportunity to finalize their orders online with the use of a credit card rather than limited cash at a party. For the Multi-level Network Marketers whose largest area of sales is through in-home parties, like Melaleuca, renting a wireless credit card payment processor can be a priceless investment, considering the dramatic increase in sales results in your promotion and bonuses.

Organizations such as Tupperware, Premier Designs Jewelry, Avon, and Mary Kay are very popular career choices with stay at home moms. Representatives are often assigned codes for online purchases and may encourage those in attendance of their parties to make their purchases online to receive exclusive discounts. Considering not everyone has a computer with Internet service, wireless portable processors are a good choice for these particular Network Marketers as well. Your number sales can be doubled simply by making available the option of purchasing with a credit card.

Another option is accepting wireless credit card payments via cell phone with Internet access. Merchant Commerce and Total Merchant Services are two of the industry’s most reliable providers of wireless credit card payment processor services; such as using a wireless Verifone mobile credit card payment processor. Offering the option of paying with credit cards will almost immediately increase your level of sales and success.

Did you know that merchants pay a fee to process credit card purchases when you shop in their stores? These are called interchange fees. They are represented by a percentage of all of the sales that are charged onto credit cards which is only several points. But it adds up quickly for merchants. There are a few things you need to know about interchange fees and how they affect you as a credit card user.

Higher prices

Interchange fees are one of the highest expenses of a merchant right behind payroll. In fact, they are more than rent most of the time. That creates a situation where merchants are forced to raise prices as an off-set to these fees. They will say otherwise, but it has been all too often proven otherwise. Take away: merchants that do not accept credit cards might have lower prices.

Convenience to you

Merchants do not have much of a choice in accepting credit cards if they want to remain competitive in today’s retail market. Not doing so puts them at a disadvantage to their competition. Take away: it is easy for you to walk in and pay for your purchases with credit or debit cards because of this system.

Pending legislation

There is a law pending that will likely create a higher fee for interchange rates for merchants. This law will allow merchants to charge higher prices specifically when you use credit cards for your purchases. Take away: higher interchange fees means higher prices for you at the register.

There are different interchange fees for different merchants from card issuers. For example, MasterCard has over 120 different rates for the various kinds of retailers. Supermarkets have the lowest rates, while Internet based retailers pay the highest.

Knowing the above information can help you be a wise shopper and user of credit cards.

If you plan to travel overseas, you might be wondering which credit cards you should use. Between high exchange fees and surcharges, some credit cards don’t do much to add to your travel experience. USA Today recently listed their top picks for foreign purchases.

Lowest Foreign Currency Surcharge

Capital One: 0%
American Express: 2.7%
Bank of America: 3%
Citibank: 3%
Diner’s Club: 3%
Wells Fargo: 3%

Capital One came away the clear winner. That covers purchases made in foreign currency, but what about purchases made in US dollars? It appears that Bank of America, Citibank, and Diner’s charge the same amount, even if there is no actual currency exchange. American Express and Well’s Fargo don’t add a surcharge for dollar billing.

In keeping with their 2001 advice for foreign travelers, USA Today still recommends using debit cards for cash and credit cards for large purchases. Since traveler’s checks and currency exchanges lose 5-10% of their value in fees, stick with the plastic when you travel abroad.

For the full list of traveler-friendly credit cards, go to USA Today’s web site.

Intuit has just made it easy to process card payments anytime, anywhere. GoPayment, Intuit’s new mobile credit card processing software, lets you take credit card payments on your cell phone or other mobile device. All you have to do is swipe the customer’s credit card using a blue-tooth enabled card reader, and all of the card details populate a form on your cell phone. Then you send off the payment for approval, and the sale is done.

GoPayment will be convenient for small businesses that don’t operate from a traditional office setting. You can choose a card reader that has a built-in printer for on-the-spot receipts, or you can send customers their receipt through e-mail or text message.

The GoPayment card swiper is small enough to easily fit in a shirt pocket, while the card reader with built-in printer can comfortably clip on a belt. Card details can also be entered manually. GoPayment is available for a set-up fee of $59.95 and a monthly charge of $19.95. It can be used on any cell phone with mobile web browser software.

You can view Intuit’s GoPayment product demo here.

Have you ever been standing behind someone in a check out line who opens their wallet to get out their credit card to pay… and noticed a rolodex-style wallet containing what looks like a hundred different credit cards?

Are you that person?

How many credit cards is reasonable?  I guess it really depends on each individual, but the general recommendation is to carry somewhere between two and six different credit cards at the most, and they should be the top issuers- Visa, MasterCard, Discover or American Express.

You should also have a goal to pay off your credit card statements in full each month, so keep that in mind when deciding how many cards you should have in your wallet.  If you know you have a tendency to carry a balance from one month to the next, look for cards with no or low interest rates, and you should be receiving some sort of rewards from using your credit card, whether it’s in the form of cash back or airline miles or something else- with all of the various rewards programs, there is no reason not to have one you can benefit from.

The more credit cards you have, the harder it is to remember when each of the payments come due.  it’s better to select two or three cards with great rates and a solid rewards program than to try and spread your purchases out among fifteen different cards and attempt to remember when each are due!

Are you a merchant or retailer who’s tired of paying high interchange fees? Help might be on the way.

On Thursday, new legislation was introduced by House lawmakers that aims to give merchants more control over what they have to pay for credit card processing. The bill, called the Credit Card Fair Fee Act, will allow merchants to negotiate fees with Visa and MasterCard.

Because Visa and MasterCard handle two-thirds of all general-purpose card transactions, and because merchants have no negotiation power at present, there have been accusations that the card companies are engaging in anti-competitive practices and setting high fees. This bill would encourage competitive fee structures by giving merchants the chance to negotiate with banks in the presence of an anti-trust lawyer from the Dept. of Justice.

The bill is opposed by some credit union representatives, who claim that small credit unions will suffer from the proposed changes more than larger banks will. The Electronic Payments Coalition also criticized the bill, saying it was just a move on the part of retailers to make consumers absorb the costs of doing business.

Interchange fees brought in $48 billion last year, and made up roughly 1.75% of total purchases.

MasterCard’s Easy Savings Program helps cardholders save money at various merchants and retailers when they shop using their MasterCard credit card. Previously, the Easy Savings Program added the United States Postal Service to the list of merchants, giving program members an automatic 5% savings when using the US Postal Service website for Click N’ Ship supplies, including shipping labels and postage.

Now, Dunkin’ Donut lovers can take advantage of a 5% discount on any purchases made at Dunkin’ Donuts for members of MasterCard’s Easy Savings Program. Obviously, cardholders are benefiting from savings at their favorite retailers, but it’s important to note that merchants who participate in MasterCard’s Easy Savings Program are also benefiting. The rebates and discounts cardholders receive encourage people to shop there, including people who maybe wouldn’t have shopped at that retailer without the discount as they want to gain the most benefit from the Easy Savings Program membership.

MasterCard estimates that members of the Easy Savings Program spent 60% more with merchants who are part of the program.

Recently, an app was developed for the iPhone that allows business owners to accept credit card payments with their iPhones – called iSwipe.  This is ideal for businesses that travel to trade shows and expo events as it allows them to accept credit card payments from their customers even when out of the office.

iSwipe is also useful for people who run party-plan businesses (Tastefully Simple, Tupperware, Creative Memories, etc) because when you are out giving parties in your customer’s homes, you can easily accept and verify credit card payments before you get home.   Rather than having your customers write their card information down on an order form, you process their payment immediately (avoiding potential problems with illegible writing or nonsufficient funds), and save yourself the extra step when entering customer orders at a later date.

The iPhone app works with the three most commonly used payment gateways for small business owners, including Paypal, Authorize.net and Cybersource.