Mogul of Pineapples
- Centurion Member
- Posts: 1271
- Joined: Sun Jun 01, 2008 11:32 pm
- Location: Smogland
Merchants usually have to pay a slightly higher percentage for reward cards. Also when a transaction is keyed into a credit card terminal instead of swiped the fee usually goes up. Basically there's the "qualified rate" which is the standard rate a merchant is charged, but reward and business cards fall under the "mid qualified" rate which can be up to 1.5% to 2.5% higher. Rewards cards can be up to 40% of the transaction fee the merchant pays. A "non qualified" rate is usually the highest rate and that includes keying in the number by hand and some other situations. Those can be 2.0% to 2.5% higher than the qualified rate. Merchants also have to pay chargeback fees can be $25 to $50 each and this is when someone makes a complaint about the transaction to the credit card company and the fee is successfully reversed. Processing fees for debit cards are much lower than credit cards and this is why when you swipe your debit card they usually try and prompt you to process it as a debit instead of credit transaction. Those are merchant fees in a nutshell.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.
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MorePrimary Everyday Card: American Express Blue CashPrimary Travel Card: Chase Sapphire Preferred