Accepting Credit Cards
Credit and Debit Cards
Credit
Merchant Accounts

Would accepting credit cards increase or decrease your bottom line?

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2009-09-15 06:12:03
2009-09-15 06:12:03
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When looking into accepting credit cards, remember that credit card transactions and credit card processing are a business in itself. The main goal of merchant account providers and credit card companies is to make money. This is a business that you are paying for. Therefore, it is important to evaluate whether the costs you pay for accepting credit cards are worth it in relation to the benefits it provides your business.

The money your business pays for accepting credit cards is called ?interchange.? Interchange is ?the clearing and settlement system in which raw data is exchanged between the acquirer and the issuing bank.? Although you may be quoted one rate for this service, everything depends on how your account is set up before the rates you pay are actually determined. To receive the best rates possible, it is important to understand how the costs will affect your revenue.

Evaluating the costs is the trickier part of the equation. The benefits that your business would derive from accepting credit are easier to identify. The one thing all customers seem to desire is more options. Accepting credit cards provides your customers another option for making payments, and they will be more willing to buy something because they don?t have to worry about having the actual money for it right now. Also, accepting credit gives you unlimited ability to reach new customers. Some customers prefer not to patronize a business in which they can?t use credit, so accepting credit will open you up to a whole new customer base.

Most importantly, accepting credit will add tremendous profits to your bottom line. Profits generated from credit cards will keep your employees paid, allow you to pay for better healthcare for your employees, and offer better discounts and services to your customers.

Therefore, you must evaluate the total cost of accepting credit cards (including all payments and fees) and weigh that against your customer base. After evaluating your customers, including what they buy, how much they spend, and what forms of payment they use; it will be easier for you to realize whether accepting credit cards would truly benefit your business.

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Related Questions


A debit would increase and a credit will decrease .

Increase liabilities = credit Decrease labilities = debit

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Any credit is an increase to an account. A debit is a decrease to the account.

increase items in business we use debit. decrease items in business we used credit

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Credit causes the decrease in assets only because assets has debit balance as a normal balance while all other items has credit balance and credit causes the increase in them.

Accounts receivable is a debit.Answer:Accounts receivable is an asset and therefore maintains a debit balance. This is an account listing what a person or company owes you, or money that you expect to receive. Since it is an asset (all assets maintain a debit balance) it means to increase the account you debit it and to decrease it (when a payment is made by the customer) you credit it.Assets = debit balance (increase with debit, decrease with credit)Liabilities and Owners Equity = credit balance (increase with a credit, decrease with a debit)(GAAP)

Yes, a debit decrease liability and a credit increase liability. if a debtors/customer make the repayment obligation, it will decrease debtors, meaning decrease in liability.

The accounts payable balance is a credit, so a debit to this account will decrease the balance.

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It increases the amount owed, because creditors would be credited

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