Credit Cards

Q: I'm opening a gift shop and want to be able to accept credit cards. I talked to the branch manager of my bank, but do not seem to know much about how it all worked. a l said I would need something called a "merchant account" and something more like "a credit card processor." Beyond that it seemed as lost as me. I'm thinking of going to another bank. Can you explain how it works? – Mary Ann G.

A: Mary Ann, I'm going to give your bank the benefit of the doubt and say that a lack of knowledge about the details of credit card processing is not necessarily a reflection of the competence of the banker. I have found in recent years that most bankers, no matter the experience or knowledge about the banking business that my be, do not know much about how credit card processing and acceptance really works. That's because the task of accepting and verifying credit card purchases is handled by firms services of others and that the process of deposit (or settle) the funds in a bank merchant account. The decision to accept credit cards is a wise for any retailer. I agree with financial guru Dave Ramsey's teachings regarding the use and abuse of credit cards. Many people dig deep holes with credit cards that are difficult to exit. But from a practical point of view, any retail business that accepts credit cards are leaving money on the table.