Starting your very own small business can be a very exciting and very stressful time.  Even before the doors open, a massive amount of work needs to be done to ensure the business is successful right out of the gate.  Too many small businesses fail because they’re unprepared with initial costs and one of the ways to ensure any small business is getting the best bang for their buck is by owning a small business credit card.

Most small business credit cards are geared toward two types of rewards programs; travel and cash back.  Here’s a look at the ten top small business credit cards available to business owners today.

The Plum Card® from American Express OPEN

My personal favorite, the Plum Card from American Express OPEN is a charge card which simply means that a small business owner has no pre-set spending limit.  This also means the card has no interest rate so purchases are due in full every month.  As an added bonus, if you pay 10 days early each month, you’ll receive a 1.5% discount, effectively providing you with a 1.5% cash back rate.  There is an annual fee of $185, but it’s waived during the first year.

Ink Cash(SM) Business

The Ink Cash Business offers the biggest up-front incentive on our list, giving new cardholders a $250 cash bonus after they spend $500 in the first three months.  5% cash back is earned on office supply, cellular and cable services, 2% cash back is earned on gasoline and restaurant purchases and 1% cash back is earned on all other purchases.  There is a limit of $25,000 spent annually that triggers the 5% and 2% cash back categories (so once you’ve spent $25,000 in gas and at restaurants, you’ll earn 1% for the remainder of the year) but this card also includes a 0% intro APR on purchases for six months AND does not charge an annual fee.

The New Business Gold Rewards Card® from American Express OPEN

Another one of American Express’s line of charge cards, the new Business Gold Rewards Card from American Express OPEN dishes out rewards points in tier levels.  3x points on travel purchases, 2x points on gas, advertising and shipping purchases and 1x points on everything else makes for a very solid rewards program.  There is a hefty $175 annual fee which is kindly waived during the first year and every small business owner can expect the full line of AMEX perks.

Capital One® SparkSM Cash for Business

A fairly new credit card, the Cap One Spark Cash for Business is a no-nonsense small business card offering 2% cash back on every purchase.  New cardholders will also earn a $100 cash bonus after spending $1,000 in the first three months with another $50 cash bonus coming after an additional employee is added to the account.  The $59 annual fee is waived during the first year and this card includes a very low 13.9% variable APR.

TrueEarnings® Business Card from Costco and American Express

The best card on our list for the local traveler, the TrueEarnings Business Card from Costco and American Express offers 4% cash back on gasoline purchases (up to $6,000 spent annually), 3% cash back at restaurants, 2% cash back on travel and 1% cash back on everything else.  The 1% cash back includes at Costco and there is no annual fee so long as your Costco membership is paid every year.  Cardholders will also find a 0% intro APR on purchases for the first six months.

Bank of America® Cash Rewards for Business MasterCard® Card

Another great cash back business card to fill out our list is the Bank of America Cash Rewards for Business MasterCard Card.  Cardholders will earn 3% cashback at gas stations, office supply stores and for computer network services, 2% cash back at restaurants and 1% cash back on all other purchases.  There is no annual fee to own this credit card and it comes with a 0% intro APR on purchases for the first nine months.

The Business Platinum Card® from American Express OPEN

The most powerful of business credit cards, the Business Platinum Card from American Express OPEN provides its members the best perks any business card can.  Complimentary airport lounge passes, an annual $200 travel reimbursement and 24-hour concierge service are just some of the things every business owner will receive when owning this charge card (remember, payment in full every month). The big downside to having this power and prestige is a $450 annual fee.

Capital One® SparkSM Miles for Business

Similar to the Spark Cash card listed above, the Capital One Spark Miles for Business offers double miles on all purchases.  10,000 bonus miles are provided to businesses that spend at least $1,000 in the first three months of card ownership and another 5,000 miles are awarded when an additional employee is added.  A $59 annual fee accompanies this travel themed small business card but Capital One will not charge it for the first year.

SimplyCash® Business Card from American Express OPEN

The least expensive American Express business card to own; the SimplyCash Business Card from American Express OPEN provides cash back on every purchase.  It’s earned based on purchase categories; 5% cash back on office supplies and wireless services, 3% cash back on auto gasoline and 1% cash back on everything else.  Cardholders can save an additional 3% – 10% on select merchants like FedEx and Hertz and are also offered a 0% intro APR on purchases for 12 months.  This card is annual fee FREE.

Capital One® SparkSM Classic for Business

The last but not least card to make this list is the Capital One Spark Classic for Business.  This is actually the small business card I own, and I chose it because my credit score would be classified as below-average to average.  The card offers 1% cash back on all purchases and does not have an annual fee.  The upside is that it’s perfect for a small business owner with less than excellent credit … the only card on our list which is offered to mid-600 FICO score consumers.

About the Author: Founded in 2004, CompareCards.com is an online resource that provides expert reviews, tips and tools to find and compare credit cards.  Visit CompareCards.com today and review the credit card deals that fit your lifestyle and/or current needs.  

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Photo Credit: Andres Rueda

In this fast paced world, things are becoming more technical. We have entered the digital economy and most people nowadays are dealing with the largest network in this universe, the internet. Almost everybody, during week days, spend time in their offices in front of a computer, surfing and working through internet. During week ends, they are at their homes, still slumped in front of their laptops, desktops or tablets, spending their days off with what Facebook can offer them.

Gain Online Presence

At one point of your existence in the cyber world, you have ‘googled’ yourself (no need to deny it, I’ve done it myself). Google is probably the most checked site by everyone. It is fascinating that this site could know almost everything about anything.

If you want to be found by your target market, make yourself visible by putting up your website and market the products or services you offer. Make it more interesting by having a blog site as well. It is more convincing if the approach you use is on a first person basis, like talking directly to your niche. People greatly consider anecdotes and testimonials to support their decisions in acquiring your services or products.

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Every small business dream begins with the simple idea of making money while providing a needed product or service. As businesses evolve, their proprietors quickly learn that the product or service isn’t where all the effort is; tracking, managing, and even getting the money all take their fair share of work as well. While financial management can (ironically) be costly if you don’t have the right tools, there are plenty of free resources to help organize your business’s income, saving time and money. Keep your business on the right track (and out of debt) by taking advantage of these 4 free tools: 

Mint

One of the most popular free finance tools is Mint.com, an online application that allows you to manage all of your financial accounts in one place. The clean, streamlined interface makes it easy to use, giving this tool major brownie points. Mint works automatically, pulling information from your checking, savings, investment, and retirement accounts, and displaying it visually with handy graphs and charts.

Beyond account monitoring, this tool helps you set a budget and financial goals, making it a valuable asset for any small business. The icing on the cake is Mint’s mobile device support and integration, enabling finance tracking on-the-go.

Sage Billing Boss

Who said invoicing had to be complicated (or costly)? This feature-rich invoicing system allows you to organize customers, track payments, and even collect money. You might be expecting a customer limit or an upgrade fee hidden somewhere, but all of Sage Billing Boss’s features—including unlimited invoices and customers—are completely free.

Built especially for small businesses, this tool integrates handy options like recurring invoicing, online payment tracking and quotes. If you’re looking to get organized and save time on small business invoicing, Sage Billing Boss might be all you need!

Google Wallet

Previously Google Checkout, this tool serves as a virtual wallet that securely holds your payment information for faster purchasing and better tracking. Google Wallet helps make light work of online purchases, storing your credit card and billing information for easy access when you pay through a merchant’s Google Checkout button. It offers fraud protection and even helps keep your email address confidential, keeping unwanted emails at bay.

Google Wallet’s latest feature is the ability to make purchases in-store using its mobile app; just tap the phone on participating credit card devices (at the time of this writing it only works with the Nexus S 4G phone).

Moneytrackin’

The key to staying organized is keeping relevant information together in one simplified location. That’s what Moneytrackin’ promises to do with its free online app. Keep tabs on income and expenses on all of your accounts, tagging transactions for easier grouping. If more than one person is involved with your business’s finances, you’ll appreciate the collaborative working capabilities this tool offers, including budget-sharing. This may not be as robust as Mint’s application, but it offers a clean-cut solution to organizing and keep track of your company’s finances.

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About the Author: Chris Turberville-Tully is a marketing strategist for Personal Touch Debt Solutions, a debt management company providing personal security, debt payment plans, expert advice and more.

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As a business owner, you understand how important it is to be accepting of your customer’s various beliefs and ideas. While you may have different beliefs or ideas, when it comes to making a good impression on your customers, accepting theirs is vital. At the holiday season, you may want to avoid the overtly religious cards in favor of more generic options.

Know Your Audience

To you, the greeting “Merry Christmas” may seem completely innocent. However, some people are sensitive to the underlying religious connotation of this greeting. If they do not celebrate Christmas, but rather celebrate Hanukkah or Kwanzaa, they may feel put off by a traditional Christmas card.

One way to avoid offending someone on your holiday list is to tailor your cards to each customer. If you know the religious bent of your customers, you can send an appropriate card. It will make a tremendous impact on your Jewish customers, for instance, if you specifically target them for a Hanukkah card, rather than a Christmas or generic holiday card.

This, however, is quite time consuming, and may not be possible in a business where you do not have that level of personal information about your customers. You will have to evaluate whether the potential benefit you could receive is outweighed by the additional time and effort you would have to expend to personalize your greeting this way. The answer may depend on the size of your mailing list. In instances where personalized attention is just not practical or possible, a generic holiday card may be a better option.

Generic Can Still Work

If you decide to go the generic route, you still need to pay attention as you select your card. A card that says “Happy Holidays” may still have a holiday specific picture on the front. Safe images are peaceful winter scenes, pictures of wreaths or other generic holiday décor, and even doves with an evergreen branch in their mouths.

These rules may not apply to your business if it is a religious based business. A church or Christian bookstore, for instance, can safely assume that most of its customers, if not all of its customers, follow a similar set of beliefs. Thus, sending religious holiday cards is safe and probably expected.

Even if you must go generic, be attentive to the quality of the card. Generic does not have to equate cheap. Take the time to find quality, yet appropriate, cards so that you can effectively reach your customer base at the holiday season, regardless of their beliefs.

About the Author: Monique Trulson works for eInvite invitations, an online retailer of holiday cards for business, destination wedding invitations, party invites, announcements and more.

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Here are 5 critical questions you must ask your current or prospective processor to make sure that you are not getting completely ripped off!  It’s hard enough out there folks, you don’t need to give money away.

1.  What pricing model am I on? Tiered (Bundled) or Interchange Plus (Pass Through)?

• If they say tiered, move on to the next processor.  This pricing model is the most costly.
• If on Interchange, you will receive your proper credits from the Durbin Amendment and exchanges, unlike with Tiered pricing.
• Also, if the processor does offer Interchange Plus, what is the markup?  This is the one portion cost that can be negotiated.  Processors may hide exorbitant processing markups within this pricing such as their transaction fee and their rate.

2. Do you have an early termination fee/policy?  What is it?

• Contract terms will likely be in 1-3 year increments.  Should you terminate your contract early, you may be susceptible to a flat fee of say $300.00. In some cases, the processor may take the average processing income they made off you in the previous 3 to 12 months and multiply that by the number of months that you have remaining on your contract.
• If you are already on a tiered pricing model and you have a low flat fee to terminate your contract, do it. You’ll make up the loss in no time by switching to an Interchange Plus pricing model with a low processor markup.

3. Do you rent your equipment or sell it?

• This is a big one.  Many processors will try lease you a credit card machine for a low flat rate of $30 per month. The problem is that you may have to sign a 3 to 5 year lease when the unit sells for only $100.00!
• It’s always better to purchase equipment rather than leasing it.
• Also, do not buy proprietary leasing equipment that will only work with a particular processor.  In the event that you want to change processors in the future, you want to make sure that you have a compatible setup and don’t have to buy all new equipment.

4. How long are my rates good for?

• Processors may coax you in with great rates, but what they fail to tell you is that the rates may increase in a few months.  Once the magical hour of midnight hits on your last contract day your “real” rates will kick in and there will be nothing that you can do about it.

5. What are your rates?

• It’s best if you are in the driver seat.  Get organized and create a spreadsheet before you start making calls to processors.
• Research what rates are acceptable per your industry and come up with a list of demands for your processors.
• Let them know what your terms are. The following items must be on your demand list.

1. I will only consider interchange pass through
2. Give me your best rate up front as you will only have one opportunity to do so
3. I will not lease my equipment
4. I will not pay an early termination fee

About the author: Jason Ezzo helps businesses save an average of 45% on credit card processing services at CardFellow.com. CardFellow is a free Web site that allows businesses to receive multiple interchange plus quotes from leading processors instantly. We’re ready to help you keep your credit card processing fees to an absolute minimum.

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Whether you’re working from home or providing internet to your small business’s office, there’s more to consider when choosing an internet service provider (ISP) for business than for personal use. Even with an office of only 8 people, internet failure for one hour means an entire business day’s worth of productivity went out the window. While no internet service can be perfect all the time, some providers are more reliable than others. If you’re looking into a new internet service for your small business, be sure to keep an eye out for these criteria:

24/7 Customer Support

Technology is not always our friend, which is why you need the best friends you can find at your ISP. A quality tech support service will be available any time of day (if you work from a home office, you know 1am is not an unreasonable time to need service). The speed with which an issue is given attention and even the courteousness of the staff can make all the difference in the world when you are experiencing problems. Investigate whether your provider has local support that can visit your location if an issue cannot be resolved over the phone. Perhaps the best way to gauge the tech support is to ask friends who have used the service; if you don’t know anyone personally, check reviews on reputable consumer watch websites like consumer search.

IP Address Options

Your IP address, or the identifying number assigned to your computer as it connects to the internet, can take one of two forms: static or dynamic. Dynamic IP addresses draw from a pool of addresses that gets shared among other dynamic users. It usually changes each time the user logs in, and  several users will often be assigned the same number at the same time. This is often the cheaper option of the two and is acceptable for less internet-dependent businesses. Static IP addresses stay constant and are recommended for VOIP (Voice Over Internet Protocol) or for using your computer as a server. It’s more expensive than dynamic hosting and is allegedly less secure because it is easier to track an unchanging address — but it is indispensable when you have more rigorous internet needs. Make sure your ISP provides the IP Address options you need, and allow for changes if your needs change in the future.

High Bandwidth

Of course, no discussion about ISPs would be complete without touching on bandwidth. This number, measured in megabytes per second (MBPS), the big selling point ISPs use in their advertising, but you should be aware of the fine print. Bandwidth comes in two forms: upstream and downstream. Downstream bandwidth is the speed that users can download data from the internet – the bulk of most internet usage. Upstream bandwidth—the speed with which you can upload items—is typically a fraction of the downstream speed, but should be considered if your business requires large files to be uploaded on a frequent basis. Be cautious when comparing advertised bandwidths; usually, the number you see is the maximum speed under the most optimal conditions. The actual speed may be lower, so you should investigate the minimum guaranteed speed.

Included Security

A good ISP will include a security package for you. Security is important for any user, but it’s crucial for a business owner. Features should include firewall protection, which is software or hardware that protects your computers against outside attackers. Both hardware and software firewalls offer specific advantages, but the best protection includes both. Other security features an ISP may offer include virus protection and identity protection software, data backup, and network monitoring. Evaluate the security features offered by various ISPs to determine who offers the most; if you are sold on an ISP that offers less free protection than the competition, they may offer more if you tell them you are considering another company that offers more.

About the Author: Chris Turberville-Tully is a marketing strategist for NewNet, a UK-based internet, hosting and networking solutions company. NewNet services include data centres, dedicated servers, web hosting, business ISP and more. Follow NewNet: http://twitter.com/#!/NewNetISP

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Bosses Day is today – October 17. If you have a great boss, let them know how much you appreciate them. Who knows, maybe they’ll appreciate your thoughtfulness enough to add a little cushion to your holiday bonus.

And if you have a terrible boss… then it sucks to be you. Few things make going to the office day-after-day and week-after-week worse than a really terrible boss. Here are a few types of bosses that you should do whatever you can to avoid.

The Narcissistic Boss

This boss thinks that everything is about them. He or she will strive to look and act perfectly in front of their superiors, but when they aren’t putting on a show, the claws come out. These bosses will sweet talk you to your face then steal all of your best ideas and pawn them off as their own. Watch out for the extreme version of this boss – The Sociopath.

The Idiot Boss

This sad excuse for a boss got promoted to his or her current position because their dad owns the company or the system just failed in a terrible, terrible way. This boss not only drains your energy level, he or she brings half-ass work to the higher ups, which reflects poorly on you. Do whatever you can to get away from this dead-end boss.

The Inappropriate Boss

This boss is one of the worst because he or she makes the work place uncomfortable on a regular basis. This is the boss who calls the girls sweetheart or gives the guys a slap on the butt. Basically, he is a sexual harassment lawsuit waiting to happen. If you have this boss, don’t be afraid of the system – report them as soon as possible.

The Cruel Boss

Possibly the most demoralizing of all bosses is the one who is mean spirited for no reason. This boss gets off on making his or her employees feel small and invaluable. Don’t let your soul be crushed by a boss like this. Apply for a transfer, and in the meantime, try not to take it personally.

Your Turn…

Have you ever worked for one of these demon bosses? What nightmare boss did we leave off the list?

About the Author: Greg Buckskin is a writer and marketer for CableTV.com.

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The speculative bubble of “dot com” era was a period of rapid growth followed by a significant decline between 1995 and 2000. Many of the companies that prospered during this brief explosion relied on venture capital and initial public offerings to cover expenses.

They valued growth over profitability which later led to significant problems. Companies soared to incredible heights on paper with little actual value, leading to numerous repercussions in the financial world. Even at the time, one didn’t need a PhD to see the problems in online businesses, Companies of today may learn from the mistakes of this time.

1. Using IPOs and Venture Capital for Expenses

Many successful businesses such as Amazon.com, Google, and eBay survived the dot com era. Amazon and Google in particular relied on IPOs and venture capital for expenses, used the free spending strategy, and valued growth over making a profit in the first few years as their stocks soared exponentially. During this time, the founders mostly had no income. Many people profited from this speculative wealth that ultimately led to crash. Educated investors knew the crash was coming and thus profited from the companies’ growth and got out before the stock market crashed. Companies should have a plan for profitability and capital for expenses to avoid this pitfall.

2. Failure to Develop a Solid Business Plan

Businesses should develop plans that include strategies to become profitable within a short time. Investors are more astute since the ’90s’ dot com bubble, and are less likely to invest in companies when the stock prices are overvalued and the fundamentals aren’t favorable. Profitable business plans should include a strategy for marketing, sales, product development, and asset acquisition. Without both long-term and short-term strategy, businesses will fall victim to using the Internet for growth with little concern for their sustainability.

Dot-com-era business all had similar business plans essentially promoting a monopoly in each particular sector. Ultimately, this strategy would allow only one company to emerge successfully and the majority would fail. Moreover, some businesses’ ideas simply didn’t pan out. For instance, online retailers didn’t consider that huge shipping costs would deter users. Their business plans and models were not well researched and didn’t anticipate potential problems that e-commerce would bring, but just relied on the momentum of the public to propel the ideas.

Businesses with novel ideas that will change the way people interact in the world should recognize that these ideas are not developed instantaneously. Many companies have become seemingly successful overnight, but other vital events happened to prepare them for this success. Every company should recognize that not every idea will be profitable immediately.

3. Free Spending

Venture capitalists were freely giving money to business owners, and business owners were freely spending it in turn. They purchased lavish items for the business, took expensive trips, and stayed in luxury hotels. Executives were paid in stock options as opposed to cash. Many of the founders became instant millionaires after the IPO, then founded more dot com companies to repeat the cycle of empty explosive growth. Businesses need to spend prudently until they become actually, sustainably profitable.

4. Predictive Tools Not Used

Many business owners mistakenly expected the adoption of the Internet to be immediate. Current and historical data should be gathered and analyzed to avoid similar mistakes with other new technologies. Numerous tools have been developed since that time to help investors and business owners analyze the market. With these tools, business owners may better be able to identify ideas that don’t have the potential for longevity.

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These are just a few problems that occurred during the dot com era that were detrimental to companies. From the business plan designed to create monopoly to the lack of use of predictive tools for success, the dot com era was plagued with mistakes. The self-made millionaires of the time might disagree, as well as companies such as eBay, Amazon, and Google that survived the crash and continued as internet giants. They are, though, the exceptions, not the rule. In general, businesses should adhere to basic models and principles with proven success rates, even if a lucky few have managed to shoot the moon.

About the Author: Elaine Hirsch is kind of a jack-of-all-interests, from education and
history to medicine and videogames. This makes it difficult to choose just one life path, so she is currently working as a writer for various education-related sites and writing about all these things
instead.

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In a day and age when the economy is not being very kind to many companies, how can your small business get its footing, especially when just starting out?

As many small business owners know, starting a new company even in the best of financial times can be challenging.

According to numbers from the Small Business Administration (SBA), seven out of 10 new employer establishments survive at least two years and 51 percent survive at least five years.

While those numbers help to dispel the long-standing belief that many small businesses fail in their first year, the facts are many do just that. Oftentimes, it comes down to simple decision making items like finances, to grow or not grow the staff, being an online fixture and so on.

Challenges Facing the Small Business Owner

In order to get a small business successfully up and running, companies need to build a positive revenue stream, advertise their business, and in many cases hire employees and more. When all is said and done, it can be quite an expensive venture.

While small business owners need to be positive in their venture, they also need to look out for the traps that await them, potentially leaving them in financial peril for years to come.

Among the 6 challenges to steer clear of are:

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1. Beginning a business for the wrong reasons – The reasons can include wanting to have a business to make a bundle of money or getting away from micromanaging managers. While those may be popular reasons, they can also lead one to disaster;

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2. Not having enough financial backing – Too many small businesses start out with good intentions, but they don’t have the financial capital that is truly necessary to make a go of it. While putting one’s business plan together, make sure that the necessary financial capital is in place, including being able to weather some tough times and/or until sales outpace expenditures;

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3. Being a poor manager – Whether the new small business is a one-person show or will involve a number of employees, it is important that solid managerial skills are in place. As many small businesses that have gone under after a short period of time can note, the way things were run could have been better. It is important for small business owners to know how they want to run things from the start, be able to adjust to issues, and know how to manage people if part of the scenario;

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4. Locating the business in the wrong area–If one’s small business is easily accessible and in a high traffic area, the odds are obviously greater for more business. Being located off the main thoroughfare, meantime, can be the death sentence for even a well-planned out business. When shopping for a locale for one’s small business, it is important to determine foot and motor traffic, where competitors may be located, any crime issues in the neighborhood and more to put the business in the best location to succeed;

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5. Growing too quickly – While success early on is great, too many small businesses try and grow too fast, leading to financial issues. As part of one’s business plan, map out the goals of the company and when growth may or may not be a possibility. Sometimes it is best to hold off on expanding the company in order to build up reserve funds, and then expand when the financial timing is better. If thinking about expanding, determine if the current workforce can handle the added work before bringing on new employees and having to factor in salaries and healthcare;

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6. No or limited online presence–In today’s electronic age, too many small businesses still do not put enough emphasis on having a strong Web site presence with which to market both their products and services. By not doing that, they lose out on the ability to interact with both current and potential customers. As more customers turn to online shopping for their needs, small businesses that are hesitant to do so stand the chance of missing out on potential revenue.

Small businesses are the backbone of the American economy; the key for small business owners is to be sure that they put themselves in the best position to succeed, something which is no small task in this day and age.

About the Author: Dave Thomas, who covers among other subjects vehicle insurancewrites extensively forwww.business.com an online resource destination for businesses of all sizes to research, find, and compare the products and services they need to run their businesses.

Photo Credit: Paul Keller

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Retailers may now refuse credit card purchases below $10 or charge a dollar for these purchases. The Federal Reserve was given the right to issue this rule and to decide the minimum purchase amount. It was set at $10. The Federal Reserve could change the amount. This new rule was approved by the Congressional “Durbin Amendment”.

The minimum must apply to all cards equally. Therefore, small businesses may wish to save money by setting a minimum $10 charge on Visa, MasterCard and Discover purchases. This may save on credit card processing fees which often eat up profits from small transactions.

A Level Playing Field?

The small business community is happy to be protected from profit-eating small transactions. However, just regulating it does not necessarily level the playing field with regard to the credit card processing fees which are very costly for small businesses.

Shopping around for better processing servers is the only way for small businesses to retain more profits from credit card transactions. Not every server charges the same fee, and small businesses can find a better deal by seeking out a better partner for processing debit and credit cards. Some companies claim to be able to save retailers up to 40 percent; so it is worth finding out if the costs are low enough to warrant switching.

Fixed and Non Fixed Costs

As you may know, two costs are fixed: interchange rates and assessments. Interchange rates are set by the card company and cannot be changed in a processing agreement. Assessments are a series of rates and fees that are the same for all card companies.

There are at least two non-fixed costs that you can use to negotiate lower costs. Insist on interchange pass through pricing. It does not have surcharges nor does it charge more for larger transactions, known as tiered pricing. Also, you should insist on a contract without cancellation fees. They may say that its standard business practice, but that doesn’t mean you have to accept it.

How Will Companies Handle Their New Right?

In terms of the Durbin Amendment, it does represent a major change from the long standing practice of Mastercard, Visa and Discover which required retailers not to set a minimum. If small businesses tried to set a minimum on the use of these cards, they would have been in violation of their contract. This was true despite the fact that small transactions are charged the same fees as larger ones. Thus, the profits from a small transaction were quickly canceled out by the credit card fees. The effect of this amendment depends on how large companies handle their new found right; otherwise small businesses will feel held back from requiring the fee or denying the charge.

Debit card purchases cannot be held to a minimum. These were not included in the amendment. Credit card processing contracts by the big three credit card companies state that no minimum may be imposed on debit card purchases. The Durbin Amendment did not include debit card purchases when it gave power to the Federal Reserve to regulate credit card processing minimums.

About the Author: This post contributed by the cofounder of CheapestMerchantAccounts.com, a website devoted to assisting small business owners in finding the best merchant account for their business with the lowest overall costs. Our reviews compare merchant service providers on the rates offered, presence of contract/cancellation cost, as well as the customer service experience a merchant will have once they sign their agreement. Their website covers many of the top processors in the industry including niche players as well as large enterprise processors such as Elavon.

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