23 Apr Why You Shouldn’t Lease a Credit Card Terminal?
Whether you have run your business for many years or are starting a new one, you understand the vast importance of the ability to take payments with credit cards in our day and age. Today, only 27 percent of purchases are made using cash, and this number is expected to decrease down to only 23 percent in the next two years. While it is only common sense that you will likely lose sales if you cannot accept credit cards, understanding the options you have when it comes to obtaining a terminal can be a little more confusing, and there are some very valid reasons why you shouldn’t lease yours.
Understanding the Lease
Leasing makes it possible for those without the capital to obtain the equipment they need. When you are seeking credit card processing terminals, you will have the option of leasing. This option means you basically rent the unit for a specified time period. This can be an especially attractive offer to those new to the world of business and on a tight budget. However, this means ongoing costs. If you plan to be in business for a long period, which most are, you will end up paying more over time than it would have cost you for your very own terminal.
Competition has made the business world greedy, and there are a number of games lease providers plays to ensure their own business thrives. Unfortunately, this is usually at the expense of the customer. For example, they likely have access to a merchant warehouse where they can obtain terminals for discounted prices. Therefore, a unit which only cost them $150 may be quoted at $500, and you have no point of reference in which to verify they are being honest.
The Tax Advantage
You may also be enticed by a leasing company when they explain the tax advantages of leasing your credit card processing terminal with them. While this may be true, would it not be smarter to avoid the expense in the first place, keeping money in your business?
Other Hidden Charges
Finally, when setting up merchant accounts, understand the various fees involved with leasing. Some companies charge fees even after your lease is over, and you will also have to carry insurance on the device during the time it is in your possession. When you add up all these expenses and consider the terminal will never be yours, buying your terminal is a wiser option.