Unexpected Credit Card Processing Fees

October 1, 2013, Written By Lynn Oldshue

If you own a business, you need a credit card processor. It doesn’t matter what you sell–very few businesses can rely on just cash transactions.

Most credit card processing companies are transparent about the transaction fees you must pay. It is typically in the neighborhood of 3% or a certain amount of money per transaction.

However, there can be some hidden fees and other considerations that you should factor into your decision. Before you sign up with a specific processor, make sure you examine the following:

  • Early termination: There may be an early termination fee. In addition, you may also be obligated to cover other fees and charges you would have incurred for the remainder of the contract. This could add up very quickly.
  • Equipment: The processing company may push you to lease your equipment, but it is usually much cheaper to buy it outright. Compare the cost of the leasing to purchasing the equipment itself before making a commitment.
  • Withholding: Credit card processors may withhold money without notice to create a reserve for potentially unpaid bills in the future.
  • Electronic deposits: When you give a company access to your bank account for the purpose of withdrawing money for your monthly bills, you may be giving them permission to withdraw more money than you owe. This money could go to the aforementioned reserve or penalties you don’t know about.
  • Written notice: Some credit card processors will not honor a cancellation unless it is submitted in writing.

Examine the fine print on your agreement carefully for any credit card processor you are considering. Then once you are operational, make sure to check your bank account regularly. If you notice an unexpected fee, contact the company right away to correct it.



The information contained within this article was accurate as of October 1, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue