My bank called me this week which I interpreted as bad news. I immediately returned the call. In fact, there was a problem. I had exceeded my limit.
Now I am talking about my merchant account for taking credit cards so apparently, I had forgotten, that when I applied I had been given an amount that I could collect monthly. And a few years ago, it was upped. Well, she informed me that I am now collecting on a monthly basis, about 30% above my limit.
"But, this is a good thing right?" I asked.
"Why yes, but it does need more paperwork. I need a balance sheet, income statement, and a filled in questionnaired and we can raise it."
I then played a little softball talking about how since I've gotten so much bigger and have such a low chargeback rate (way short of 1%), then I must be a more attractive client. She agreed and volunteered that she might be able to get me a better rate.
And she did? While it's hard to understand, it sounds like I've gone from 1.95% to 1.8% on a key expense line. I think I'm pleased but I will keep an eye on the overall expense as a percentage of sales because now that I know it's going to move, I wouldn't be surprised if they reclassify things in such a way that the net change is not, overall, in my favor.
You are smart. It will not be in your favour. Did you find out if they classify some of your transactions as mid-qualified or non-qualified? Do you comb through your statements each month. Most of these companies make the statements difficult to dicipher. Because payment processing is so complex that they can't simplify it? NO. They don't want people to understand. The result is that you get your bill, get a headache and then just pay your bill, or not ask because you're getting auto-debited and it's so convenient. Be vigilant. I sell merchant accounts all day long and tell business owners that they are all evil. You just have to know the exact details of the deal, so that you won't be frustrated later on.
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