In a recent article on Seeking Alpha, Tom Moriarity of the San Francisco Bay Area stated, “It's hard to believe that small businesses in California can charge credit card fees. This is insanity.” I completely agree, and it is not just California; I know many companies here charge outrageous fees for credit card processing. Especially, when it is perfectly acceptable for local businesses to do so. They are charging high interest rates on accounts that are almost always paid by the end of the month, but the credit card company still wants every penny.
So if you own your own business and you get a credit card, don't be surprised if your company charges a high interest rate and you are unable to pay that balance off every month. You should always check with your credit card company and try to work with them. A lot of business credit cards have special offers that make balance transfers easier and can save you hundreds of dollars each year if you repay your balance before the due date every month. Unfortunately, many small businesses don't realize this and they wind up with a high interest rate which hurts their bottom line and can cause you to miss a payment.
Now I'm not saying that you should never get a credit card or start your own business. You just need to be aware of what fees are being charged. If you have a credit card at your business, try to pay it off every month so that you won't be hit with a high interest rate. If you don't, you need to shop around for a better interest rate from your credit card company. Some card companies may charge extra fees for cash advances and checks, late payments, and more.
The first step in eliminating these fees is to read over your current credit card agreement. Look for anything that states the credit card company can change the terms at any time. The reason is because they don't want to have to deal with the hassles of having to do reams of paperwork. Many times credit card companies will charge outrageous fees just because you didn't keep your end of the deal.
The second step is to call the credit card company. Find out what their minimum payment requirements are. You'll find that many credit card companies require their customers to make their payments on time or they are going to charge large fees. If you have a poor credit rating or no credit history at all, this can be a real problem. However, the credit card company may offer you a grace period of a few months in which you can catch up on your payments. If you have a credit history with the company, however, it's likely that you'll have to pay a higher interest rate until your credit score improves.
Now you know how to avoid being overcharged by a credit card company. Just take the time to figure out what you can afford to pay monthly. Also, remember that just because you're paying a lower interest rate doesn't mean that you can't find better rates elsewhere. Look around online for a better deal on your credit cards. You may also want to call other banks that offer credit cards to ask if they'll waive the annual fee or reduce the annual percentage rate.