Advantages of Credit Card Merchant Accounts

These days at least twenty percent of all purchases by consumers are made through credit cards. This percentage is growing steadily from year to year. Many people are finding it more convenient to carry their credit cards with them when they go out shopping than carrying a billfold full of dollars. Also credit cards are useful when people make impulsive purchases when they find a good deal while shopping. Thus it is important for merchants to be able to accept payments through credit cards or debit cards. Having a credit card merchant account enables a merchant to accept payment by credit or debit cards instead of cash.

The other non cash payment alternative of accepting payment by check is not preferred by most merchants as checks may bounce. Earlier many merchants were hesitant to accept credit cards because of the hassle of collecting the receipts and sending them to the credit card company like Visa or Mastercard. However with the rapid advancement of technology every thing is done instantaneously and the money is in the merchant's bank account immediately. Technology has simplified the process to such an extent that many merchants find it more convenient than handling cash.

There are two types of credit card merchant accounts, card present and MOTO. In the card present system the card has to be presented for the payment to be made. The card is swiped through a credit card terminal or some such appliance that can 'read' the card. Once the terminal validates the card the customer simply has to sign the receipt for the sale to be completed. MOTO stands for 'Mail Order Telephone Order'. This means that the card information is sent by telephone or mail and the card is not physically presented. This type of merchant account is less prevalent. It is preferred by mail order businesses.

Credit card merchant account providers have greatly simplified the process of setting up an account to start accepting credit card payments. Although the merchants have to bear the cost of hardware required like the Credit Card Terminal, virtual terminal, credit card imprint-terminal combination and imprint style, in most cases they provide free set up, free service and free software because they make a lot of money from the transactions. The credit card terminal or swipe system needs an internet or phone connection to be able to receive and send information to the provider about the transactions. The process is actually very simple to use. Every time a customer uses his or her credit card to pay for a purchase, once it is approved the amount is deposited in the merchants bank account after deduction of fees.

The fees charged varies from one merchant account provider to another. Thus merchants should do some comparison shopping before deciding on one. The things to consider for the purpose of deciding are fees, service and support and flexibility of payment options. The extra fees is offset by the increase in sales and profits because customers usually tend to spend more when they are using credit cards. The standard fees usually consist of swiped charges, mail, internet or phone charges, transaction fees on per transaction basis and monthly statement fees. 24 hour service support must be available as merchants would not like to lose any sales.

Every year Americans are spending billions of dollars (estimated to be more than $500 billion) every year in credit card purchases. This figure can only increase in the future. It is a well known fact that people tend to spend more when they use credit cards. Many merchants have found that their sales have gone up by as mush as 1000% after they started accepting credit cards. With so many advantages no merchant can avoid having a credit card merchant account. This system is convenient both for the customer and the merchant and that is why more and more merchants are preferring to have a credit card merchant account.


Using Your Credit Card to Manage Your Finances

Before I begin, only someone who is wise enough not to get into debt can use this method and if that person figures he is getting over their head, he should pay by cash, check or debit card. However, the wise money manager can use this method to manage his finances.

True, you may need cash and loans for big items. For instance, tollbooths and some dollar stores do not take credit cards, and neither does it look good to put your name and your credit card number in the collection plate at Church, but for most purchase, you can depend on your Master Card or Visa.

First, this will only work if your credit card carries no annual balance, has a cash-back, or points system. You must be able to pay your balance off every month and not even carry over one cent and think of your credit card as a debit card with a bonus. After so many points, you get a trip, an Mp3 player, new sheets, or whatever.

It also helps if you have a high interest savings account that you will transfer into your checking account and then after that, placing the amount you spent onto your credit card account. If you got one of those credit card insurance, it would be best to put the money on the statement before you use the card, and after a time, you will be able to estimate how much you will need.

Now many checking accounts do not carry interest unless they run into thousands of dollars, and many businesses prefer either credit or debit cards. With debit cards, the money comes out of your bank account almost instantly, whereas with credit cards, you get a little leeway.

Before you use this, you have to make sure you know what your spending habits are, because if you put almost everything on credit, and pay off each month, you cannot have surprises. So, the first thing you should do is to figure out what you cannot put on credit, the purchases you make at the Dollar Store, the odds and ends you pay cash for, and the surprises such as group wedding gifts, showers, et cetera, also anything that you cannot use your card. After this, figure out your annual payments or anything that costs considerably much. For these, you will have to deposit money into your high interest savings account and then when you have enough, you withdraw the money into your regular savings or checking account, charge the item, and then you are so many points to your goal.

After this, you make a list of what you spend each month, and then you are all set. You can now use your credit card as a debit card with no worry.