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Credit Cards: A Love/Hate Relationship That Depends on Your Perspective

As consumers we love credit cards. The attraction for most of us, probably started when we were young and were able to buy something we couldn’t afford on credit. This attraction further evolved over the years through the addition of rewards that were tied to our credit card purchases. As consumers, we have enjoyed the “benefits” of these reward programs that allow us to accrue points to use in travel, dining, and in some places, cash back in our pocket. Credit cards also provide chargeback protection in the case of fraud, non-service, and/or non-deliverability for example. That said, the average consumer has probably never asked themselves who is footing the bill for these fantastic benefits? Now this is where one’s perspective on credit cards probably differs.

Business owners who accept credit cards help fund the benefits provided by the credit card companies through the processing fees they pay each month for the privilege of accepting the consumers credit card and getting funds deposited next day into their bank account. For many business owners, these merchant processing fees can represent a substantial portion of their operating profit and at times they may feel that they are left with limited options. Just this past month, grocery store giant Kroger, who arguably already has great processing fees and purchasing leverage, took a stand. Kroger banned the use of a VISA credit cards in many of their national chains in response to what they considered the exorbitant fees VISA was charging them. Kroger felt the potential loss of VISA paying customers would be less impactful than having to raise the prices of its’ products to compensate for the increasing fees, which they felt would upset their loyal customers even more and may lead to an even greater loss of clients.  Kroger has also promised incentives to their customers to offset the inconvenience of not being able to use a VISA card. Only time will tell what impact this decision will have on all involved-Kroger, VISA, and most importantly, the customers.

While individual dentists don’t have the purchasing power and/or leverage of Kroger, they do have the ability to easily switch processors. Perhaps it’s time to follow the lead of Kroger and evaluate your own credit card processing fees? Just remember one of our golden rules: When Shopping for A New Provider Do Not Send Your Statement Until You Have Their Pricing in Writing. What they should be willing to charge you should have nothing to do with how much you are currently paying.