Figuring out the best deal on credit card processing takes some effort and they don’t make it easy. There are only a handful of credit card processors, but there are thousands of companies (including your bank) selling the service. They usually base the rate on your average ticket amount and average monthly total amount. It is difficult to compare costs because some use the tier method, others use cost plus. The best deal for the merchant (you) is usually the cost plus method.

There are three areas in which you will incur costs, four if you take American Express.

1. Monthly fee – usually $5-$10 per month.
2. Rate – the percentage of each transaction based on whether the credit card is swiped or manually entered and what type of card it is*.
3. Transaction fee – each transaction has a fee, usually 10-25 cents.
4. Not only is American Express (and sometimes Discover) processed at a higher rate, but also they will charge you a fee in addition to what the credit card processor charges.

*Not all cards are processed at the same rate. You can’t look at someone’s credit card and know at what rate it will be processed. The best rates are usually on personal credit cards that are swiped (read by a card reader). If you have to manually key in the card number it is processed at a higher rate. Business credit cards are usually not processed at the best rate. Non-preferred or non-qualified cards are cards like Visa gift cards and are processed at the highest rate, as much as 3-4%. Debit cards are also usually processed at the highest rate.

Know who is calling you. Your credit card processor is not going to call you to see if you have the best rate. Do not deal with someone who is telemarketing. They will all promise to save you money. If you let someone review your statements to “see how much money we can save you” and they come back with claims of hundreds of dollars a month, tell them to put it in writing. You probably will not hear from them again.

Your best (and safest) bet is to use your bank, use the credit card processing available within your accounting software, i.e. QuickBooks, or use a credit card processor recommended by an industry organization.