I won’t make any friends in the banking industry for saying this, but here goes.
If you already have a deal which is bad or average then it’s worth shopping
around now. You could save money, as your bank may be taking advantage of you.
A good credit card rate is between 1% and 1.5%.
An average credit card rate is between 1.4% and 1.9%.
A bad credit card rate is 2% and over.
(These rates are indications based on PDQ and virtual terminal. They will
be good for most B&Bs, guest houses, cottages or hotel businesses.)
So how do you do get the rate down ?
The first rule of dealing with bank credit card handling fees is negotiate. The second rule is negotiate and the third rule is negotiate. When it comes
to card charges, banks will try and get the highest charge they can
get away with. You can easily end up being charged 2.5% instead
of 1.5%. It’s a big difference and, let’s face it, in these times it pays to be
smart with costs. Who could ever feel bad about squeezing a bank?
We have been dealing with banks and their credit card charges for more
twelve years, so here are a few tips. I hope they lead to reducing your charges:
What factors do they look for in calculating their charge ?
Risk: The lower your risk in the eyes of the banks the better rate they give and each bank
assesses risk differently (all the more reason to try different banks).
So what are the main risk factors?
Turnover: the higher your turnover the better the deal you can get. This is a simple volume calculation. If the bank can get 1.7% on 50,000 and your turnover increases to 70,000 you could get them down to 1.5% or lower; it’s worth a try.
Competition: They all have targets to meet and if they know you are shopping around for the best deal they won’t be tempted to over charge you and risk losing your account.
If anyone has any other tips or stories I would love to hear them. Happy hunting.
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