Credit Cards
- Thread starter ken987
- Start date
- Status
Re: Credit Cards
The only thing better than cash! It costs 2% (can be negotiated) to have credit cards as payment. Money is directly deposited to your account. The major advantage is you get your money now less the fees. Checks bounce, or don't get sent.
I had a customer owing me about $3500. He was complaining about cash flow. (That's why I was visiting him. MY cash flow!) I talked to him about accepting credit cards and explained how you get your money now and he was real impressed and said he'd look into it. I said let me see your credit card I'll show how it works. WAALAA I got my money, he doesn't have to pay his bill for another month!
The downside is the 2% fee, but to get your money now and offer the customer another method to pay their bill, it's worth it!
The only thing better than cash! It costs 2% (can be negotiated) to have credit cards as payment. Money is directly deposited to your account. The major advantage is you get your money now less the fees. Checks bounce, or don't get sent.
I had a customer owing me about $3500. He was complaining about cash flow. (That's why I was visiting him. MY cash flow!) I talked to him about accepting credit cards and explained how you get your money now and he was real impressed and said he'd look into it. I said let me see your credit card I'll show how it works. WAALAA I got my money, he doesn't have to pay his bill for another month!
The downside is the 2% fee, but to get your money now and offer the customer another method to pay their bill, it's worth it!
megloff11x
Senior Member
Re: Credit Cards
Credit Cards are also good as the buyer. If the product or service is not up to snuff, you can dispute the charge and the bank issuing the card will put the onus on the seller.
Debit cards don't have the protections. If lost or stolen, your account can be emptied w/o insurance in most cases, while c-cards usually limit fraud loss to $0 or at worst $50 (unless you have a fly by night card company).
I understand that the c-card company can also takes up a buck for swiping the card, and won't let you pass this on to the customer or place a lower limit on c-card use (solution: min purchase period).
You get an itemized bill every month. You write ONE check.
The big caution is PAY THE WHOLE THING EVERY MONTH. Loan Sharks charge less interest than c-cards. In a year or two of minimum payments, you will double what you paid for the item.
Credit Cards are also good as the buyer. If the product or service is not up to snuff, you can dispute the charge and the bank issuing the card will put the onus on the seller.
Debit cards don't have the protections. If lost or stolen, your account can be emptied w/o insurance in most cases, while c-cards usually limit fraud loss to $0 or at worst $50 (unless you have a fly by night card company).
I understand that the c-card company can also takes up a buck for swiping the card, and won't let you pass this on to the customer or place a lower limit on c-card use (solution: min purchase period).
You get an itemized bill every month. You write ONE check.
The big caution is PAY THE WHOLE THING EVERY MONTH. Loan Sharks charge less interest than c-cards. In a year or two of minimum payments, you will double what you paid for the item.
sfav8r
Senior Member
- Location
- San Francisco Bay Area
Re: Credit Cards
Accepting credit cards can be good for your cash flow and also a nice convenience for your customer. I think they're a good idea.
There are things to watch however. As mentioned previously, there are consumer protections if they use a credit card. Some consumers use these in ways that are less than legitimate.
You need to be ABSOLUTELY CERTAIN that everything is in writing if they pay by credit card. This is, of course, a good idea anyway, but even more so with a credit card.
A blatant example is this. Yoou're doing a service upgrade for $1,800. You get the contract signed and everything is fine. While doing the job, you see that the laundry circuit is not a dedicated circuit and it would be easy to put the laundry on a dedicate circuit. You recommend this to the customer and they agree to a price of $125.
If they are paying by check, they add the $125 to the amount, you get your check and that's the end of it. IF they are paying by credit card, you have a contract for $1,800 and a charge on their account for $1,925. If they dispute the charge, it's your word against theirs that they wanted the extra work.
Also, the fees do add up. On the job example above the fees would be $38.50. If you bill $150,000 a year, it becomes a $3,000 expense.
I do find that people don't cringe quite as much if they can pay with a credit card. They can get frequent flyer miles, which can take some of the sting out of a purchase,and they are more likely to include an extra that they might otherwise have postponed until later.
Over all, I thing the benefits outweigh the negatives.
Anyway, that's my 2 cents ;-)
Accepting credit cards can be good for your cash flow and also a nice convenience for your customer. I think they're a good idea.
There are things to watch however. As mentioned previously, there are consumer protections if they use a credit card. Some consumers use these in ways that are less than legitimate.
You need to be ABSOLUTELY CERTAIN that everything is in writing if they pay by credit card. This is, of course, a good idea anyway, but even more so with a credit card.
A blatant example is this. Yoou're doing a service upgrade for $1,800. You get the contract signed and everything is fine. While doing the job, you see that the laundry circuit is not a dedicated circuit and it would be easy to put the laundry on a dedicate circuit. You recommend this to the customer and they agree to a price of $125.
If they are paying by check, they add the $125 to the amount, you get your check and that's the end of it. IF they are paying by credit card, you have a contract for $1,800 and a charge on their account for $1,925. If they dispute the charge, it's your word against theirs that they wanted the extra work.
Also, the fees do add up. On the job example above the fees would be $38.50. If you bill $150,000 a year, it becomes a $3,000 expense.
I do find that people don't cringe quite as much if they can pay with a credit card. They can get frequent flyer miles, which can take some of the sting out of a purchase,and they are more likely to include an extra that they might otherwise have postponed until later.
Over all, I thing the benefits outweigh the negatives.
Anyway, that's my 2 cents ;-)
- Status