| The Two Components of a Credit/Debit Card | | | | physically swiped through a terminal, including internet |
| Transaction | | | | transactions, phone transactions, or credit-card |
| Each time you process a credit or debit card | | | | numbers keyed into a terminal, fall into this category. |
| transaction, you are charged an inquiry fee and a | | | | Debit Card Rates |
| percentage of the total transaction. The inquiry fee is a | | | | Debit cards are classified the exact same way credit |
| flat amount, typically between 20 cents and 35 cents. | | | | cards are, but the rate for a debit card transaction of |
| The percentage charged, is typically called your "credit | | | | the same category and type is typically lower than the |
| card rate" and it is variable based on the type of | | | | rate for a credit card. |
| transaction and the type of card used. | | | | Money Saving Tips |
| Credit Card Rate Categories | | | | 1. If you have an account that gives you good rates |
| Credit Card Rates are typically broken into two | | | | for card-present transactions it will typically penalize |
| categories: | | | | you heavily for card-not present transactions. |
| - Card Present (where the card is physically swiped | | | | However, you can get a Merchant Account that is |
| through a credit card terminal) The lowest rates are | | | | designed for these Card Not Present transactions that |
| typically applied to card-present transactions. | | | | will provide you with substantially lower rates. Thus, |
| - Card Not Present (any type of transaction where the | | | | before selecting an account you need to understand |
| card cannot be swiped) This type of transaction is | | | | the type of transactions you use most. Also note that |
| also referred to as MOTO (mail order/telephone | | | | it is very important to immediately destroy credit card |
| order). All transactions where a credit card is not | | | | information provided in writing or over the phone and |
| physically swiped through a terminal, including internet | | | | to store electronically submitted information (such as |
| transactions, phone transactions, or credit-card | | | | that submitted over the Internet) on a secure server. |
| numbers keyed into a terminal, fall into this category. | | | | - Tip: If you regularly have both types of transactions, |
| Credit Card Rate Types | | | | create two accounts. One Type 1 account and one |
| The rate for each credit card transaction type is | | | | Type 4 account.2. Make sure your credit card |
| determined by both the kind of card used, the way it is | | | | processor is giving you separate lower rates for Debit |
| processed, and the time it takes the merchant to | | | | Card transactions. They can afford to charge you less |
| batch the transactions for processing. It is important to | | | | for these transactions, because their risk of |
| know whether you do mostly card present or card not | | | | non-payment is substantially lower. Approximately half |
| present transactions when selecting a plan type, | | | | of the transactions nationally are actually debit cards |
| because card not present charges are significantly | | | | transactions, so if you're not getting the benefit of a |
| higher in a Type 1 plan than in a Type 4 plan. | | | | lower rate, you are paying too much. |
| - Card Present (where the card is physically swiped | | | | - Tip: Very low Type 1 Qualified Debit Card rates are |
| through a credit card terminal) The lowest rates are | | | | often advertised as teasers to get people to switch |
| typically applied to card-present transactions. | | | | Merchant Accounts. Know what percentage of your |
| - Card Not Present (any type of transaction where the | | | | transactions fall into this category before making a |
| card cannot be swiped) This type of transaction is | | | | switch. |
| also referred to as MOTO (mail order/telephone | | | | Make sure you know what you are really paying! |
| order). All transactions where a credit card is not | | | | |