Credit Card Comparison Chart

Just last week, I was contacted by a merchant that had received notification of substantial increases in their rates. The processor claimed that it was due to “adjustments in interchange rates from Visa and MasterCard”. They were going to see an increase of .30% + $.10 in their Non-Qualified transactions, even though there was nothing like that reflected in the new Interchange levels.

I thought it might make an interesting topic to take a look back at credit card processing Interchange Rates. Since we just had an adjustment to rates in April, I decided to go back to April 2006 for some comparisons. As you might imagine, there are hundreds of different rates based on the card or transaction type. Rather than make this an extremely lengthy, and boring, article, I simply chose to focus on a few of the most common type transactions. So, let’s take a look:

Visa CPS Retail Credit: This is for a plain old generic Visa card (with no perks or Rewards attached) that is swiped through your credit card terminal. This still represents quite a chunk of credit card sales for most merchants. If you’re on a Three Tier Pricing, this will typically show up in your Qualified rate category. If you’re on Four Tier Pricing, it is Tier 2. If you are on Cost-Plus or Interchange-Plus pricing, it will show up as a separate line item as CPS Retail Credit. In April 2006, the Interchange Rate was 1.54% + $.10 and is still the same as of the new Interchange Rates in April 2010. How have your Qualified, or Tier 2 rates been affected in that time frame?

Visa CPS Rewards 1: Rewards cards pay the card holder some form or reward in the form of cash back or bonus points. You, as the merchant, have the privilege of accepting these cards and paying more for them. In a sense, you are paying the customer, indirectly, to shop with you. As a Three Tier merchant, these will typically be Mid-Qualified and as a Four Tier Merchant as the third tier. And, of course, as a Cost-Plus merchant, they will show up as their own line item. Interchange Rate was 1.65% + $.10 in April 2006 and is the same today. How have your Mid-Qualified or Tier Three rates been affected in that time frame?

Visa CPS 2: Simply, this Visa Rewards card pays a larger reward to the card holder and, you got it, you get to pay more to accept it. Some processors will put this into your Mid-Qualified or third tier category, however, some will slam you by putting it into your Non-Qualified or fourth tier. I know of one processor that “reclassified” Rewards 2 transactions in July 2008 (between typical Interchange Rate adjustments) and took them from Mid-Qual to Non-Qual and Third Tier to Fourth Tier…EVEN THOUGH THERE WAS NO RATE INCREASE. That represents an immediate increase in their bottom line and a subsequent decrease in yours. Why do you think they did that? You’ve seen the ads all over the place for “enhanced-double rewards” type cards. More and more consumers are getting them, and using them in your business. Interchange was 1.90% + $.10 in April 2006 and went up to 1.95% + $.10 in October 2008 and remains the same today. How have your rates been affected in the past four years in this category?

Visa CPS Key-Entered: Now this doesn’t typically represent a bunch of transactions for most brick and mortar type businesses but still warrants attention. April 2006 showed an Interchange Rate of 1.85% + $.10 but, in April 2009, it was reduced (that’s right, I said reduced) to 1.80% + $.10 and remains the same. These will be classified Mid-Qualified or Tier Three by most processors. Did your rates go down?

MC Merit III: Here again, this is a generic MC swiped through your POS system. It was 1.64% + $.10 in April 2006 but, in either April or October of 2007, they came all the way down to 1.58% + $.10 which is where it remains today. These are Qualified or Tier Two transactions. I believe the substantial drop was to come more in line with where the Visa rates were. I’ll bet your rates weren’t reduced, were they?

MC Key-Entered: April 2006 showed 1.95% + $.10 and also in October 2006, it dropped.06% to 1.89% + $.10 where it remains today. Here again, these will be Mid-Qual or Tier Three, typically. And of course, your processor reduced your rates…didn’t they?

I know this may seem to be a lot of rambling but the point I want to make is this. As you can see from these basic illustrations, there hasn’t been much in the way of overall increases over the past four years. Have your rates remained the same or have you experienced increases (like the merchant that contacted me), or “reclassifications”? Do you even know? Unfortunately, many merchants rarely look at their statements in great detail much less compare them to previous months or years to look for changes. You should definitely look at your statements each month and…COMPARE!

Let me ask you this now. In October 2007 when MasterCard lowered their rates on some of their cards, did your processor lower your rates? Nah, that never (or should I say, rarely) happens. If you’re priced on any kind of tier system, you likely didn’t see any kind of reduction in your rates. However, if you were on Cost-Plus pricing, which is the most transparent form of pricing, the reduction would have automatically been applied. At my website, which you’ll find referenced in the Resource Box of this article, you’ll find unbiased SOLUTIONS to all your credit card processing questions and concerns. My Blog, also provides timely and relative tips on an on-going basis that you will find helpful. As always, thanks for reading and please pass this article on to other business owners in your circle of influence.

Credit Card Comparison Chart

Six-Week Start-Up offers entrepreneurs a quick-and-easy, proven formula for organizing the difficult details of a new business and getting it up-and-running–fast! Designed by America’s foremost small-business advice guru Rhonda Abrams as a personal workbook.

From the PublisherIs This Book for You?

This book is a step-by-step guide for getting a successful business up and running fast. It covers all aspects of launching a business, from licenses, to bookkeeping to marketing to setting up shop. Everything is presented in a step-by-step format with checklists, worksheets, and top-notch advice from one of America’s most highly regarded business writers.

This book is for you if:
* You’re currently in the process of starting your own business and want to get things done as efficiently as possible, yet still do them right.
* You want to make certain you take care of all the details of getting a business underway, organize the process, and get some good advice.
* You’re going to start a business soon and need a plan on how to go about it.
* You have an idea for a business but don’t know where to start.
* You already run a business but would like to improve operations, marketing, and/or take care of essential aspects of growing a company.
* You’re a student in an entrepreneurship or small business class and need to launch a complete business in a limited time period.

You probably do not need this book if:
* You’ve been in business many years, and you’re not expanding or changing your business significantly.
* You’ve started many businesses successfully before and are starting another one; while this book may be a good organizing tool, it’s likely to cover information you’ve already learned from experience.
* You have no idea whatsoever of what business you want to start. If that’s the case, consider “What Business Should I Start?” also published by The Planning Shop.

From the Inside FlapYou have a great idea for a business–but now comes the tough part: making it happen. From licenses to bookeeping to marketing to setting up shop, Six-Week Start-Up guides you through every step of getting your business up and running successfully–and fast!

For many would-be business owners, coming up with a great business idea is easy; it’s getting the business up and running that’s overwhelming! If you’re ready to start your business, but have no idea where to begin, this new book by best-selling author and nationally-syndicated columnist Rhonda Abrams is for you!

Rhonda breaks down the entire process of launching a business into a six week process. Each week, you’ll address specific goals and tasks, such as developing your company brand (name, logo, etc.), analyzing your competition, or finding an office or retail location. And at every step of the way, Rhonda will be there to provide specific instructions, tips, advice, and resources.

Features include:

Week-by-Week Checklists. See exactly what you need to do on a weekly basis. Each checklist item corresponds to detailed information about getting that task done quickly.

Dozens of Worksheets. These carefully designed tools help you work through important issues and decisions.

“Questions to Ask.” Before you meet with an accountant, lawyer, investor, graphic designer, potential employees, or others, make sure you’re armed with these lists of important questions for them.

“Red Tape Alerts.” Stay out of trouble in areas related to taxes, laws, employment rules, and more.

Comparison Shopping Charts. Make smart purchasing decisions on everything from computers to office space.

Comprehensive Resource Links. Find the key information you need quickly and accurately.

Expert Advice. Rhonda’s books have helped literally thousands of businesses get off the ground—she can help you, too!

Covers in-depth:

Clarifying your business concept and defining meaningful goals
Conducting market research and developing your strategic position
Handling government requirements: licenses, permits, taxes
Managing your money: bookeeping, budgets, credit cards, investors
Developing an effective marketing and sales campaign
Hiring and leading great employees
Setting up your office/store/plant effectively
Getting and staying organized

About the AuthorA syndicated columnist, best-selling author, and popular public speaker, Rhonda Abrams has spent more than 15 years advising, mentoring and consulting entrepreneurs and small business owners. Her knowledge of the small business market and her passion for entrepreneurship have made her one of the nation’s most recognized advocates for small business.

Rhonda’s weekly newspaper column, “Successful Business Strategies,” is the nation’s most widely-read column about entrepreneurship, reaching more than 20 million readers through 130 newspapers, USATODAY.com, Inc.com, and Costco Connection magazine.

Rhonda’s first book, “The Successful Business Plan: Secrets & Strategies,” was acclaimed by Forbes magazine as one of the two best books for small business and by Inc. magazine as one of the six best books for start-ups. Now in its fourth edition, it is used as the primary text for business plan classes by more than 100 business schools.

In her second book, “Wear Clean Underwear: Business Wisdom from Mom,” Rhonda illuminates how incorporating strong values into running a business can also benefit the bottom line. She examines the business practices of several outstanding companies, including Southwest Airlines, Kinko’s, and 3M. “Wear Clean Underwear” was a selection of the Book-of-the-Month Club. It has been translated into Japanese, Dutch, and Korean.

An experienced entrepreneur, Rhonda has started three successful companies, including a small business planning consulting firm. Her experience gives her a strong real-life understanding of the challenges facing entrepreneurs. Currently, she is the founder and CEO of The Planning Shop, a company focused on providing entrepreneurs with high quality information and tools for developing successful businesses.

Rhonda was educated at Harvard University and UCLA. She lives in Palo Alto, California.

Most helpful customer reviews

46 of 47 people found the following review helpful.
Streamlines the startup process
By A
So, can you get a business started in six weeks? I think the answer is yes, but it’s going to depend on the type of business you want to start. If you’re planning on starting an amusement park or oil refinery, it’s going to take longer. But Abrams says in the introduction that this book is for more typical entrepreneurs who are planning to start a small business (retail or service company).

There are certainly plenty of other books on the market about starting a business (I’ve read many of them, and looked at many more in the bookstore), but what led me to buy this one was the week-by-week approach. Abrams starts each week with a checklist of things to get finished in that week. The first week focuses on business concept-oriented tasks (defining goals for the business, strategic position, etc.) and developing an “identity” (name, logo, etc.).

The later weeks go into things like setting up an accounting system, incorporating, finding office space, doing market research, and hiring employees.

The book has a lot of worksheets you can use to handle issues such as developing a marketing plan or personnel policies. Many of the worksheets are useful, although I wish I hadn’t written in the book itself (tip: xerox the worksheets, and write on those! that way you’ll have “backups” if you need to start over! Wish I had!).

So, after six weeks will I have my doors open for business? Yes–no question. But since I’m starting a consulting company and setting up a home office, I don’t have huge organizational issues to worry about (like building a warehouse or something similar). And I think the premise of this book will work for most people who are starting a similar *small* business. I give it five stars, though, because even if it takes more than six weeks, the information here is solid.

31 of 31 people found the following review helpful.
Helpful and clear
By A
I was already in the process of starting my business when I found this book, so I didn’t really need the first chapter to help me figure out my business concept (though the info on trademarks was helpful). But so far, I’m finding it to be a big help in getting — and keeping — me organized. I like the way the book is laid out — each week I’ve sort of got my “assignments” — the author calls them “Accomplishments” — and then each task is broken down into easily do-able steps. Its a bit like having a start-up business coach. I doubt that any one would use all the worksheets, but I was trying to figure out how to distribut my products, and the checklist in this book helped me figure out how to compare the distributors I was talking to. That one worksheet alone was worth the price of the book and more. Clearly the author has started businesses because the information and advice is just so practical. Like the “Questions to Ask” lists — all those people who told me I had to see a lawyer or accountant or whatever never told me what I was supposed to talk to them about when I finally made the appointment. This book does. Even if you’re already underway in your business, it’s worth owning.

38 of 40 people found the following review helpful.
Practical guide to starting a small business
By A
This book is a fantastic resource for anyone who’s ready to take the plunge in to entrepreneurship! Starting a business seems like such a huge undertaking, and it can be so difficult to know where you should begin. Six-Week Start-Up guides you through every single step of starting a business, from designing a logo to having a grand opening sale! All of the steps are practical and very straightforward–it’s like having an operations manual with detailed, step-by-step instructions for so many elements of starting and running a business. This book has been instrumental in keeping me motivated and feeling empowered throughout this (sometimes difficult) process.

Many of us know the common sense aspects of going into business for ourselves, things as simple as make sure you talk to a lawyer. Make sure you talk to an accountant. But what, exactly, are we supposed to ask this lawyer, or accoutant, or investor? This book thoroughly addresses exactly these types of things, making it so much easier to start your business correctly from the beginning. You don’t have to spend all of your time later back-tracking and fixing the things you did incorrectly to start with.

The bottom line: Six-Week Start-Up gives you everything you need to know and do in order to start your small business quickly, and to avoid costly and time consuming mistakes in the process. It’s a great book for new entrepreneurs who are ready to turn their business-owning dreams into reality!

See all 14 customer reviews…