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Are You Overpaying? How to Find the Effective Rate on Your Credit Card Processing Bill

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Ever looked at your credit card processing bill and wondered, “What am I actually paying?” You’re not alone. Processors don’t always make it easy to spot your true rate—but with a little know-how, you can break it down and see exactly where your money is going.

Here’s how to figure out your effective rate in three simple steps:

1. Find Your Total Fees

Look at your statement and locate the total amount you were charged for the month. This should include processing fees, monthly fees, and any other charges. If it isn’t clear, add up all the line items labeled as fees.

2. Identify Your Total Sales Volume

Next, find the total dollar amount of credit card payments processed during that same period. This is sometimes called “gross sales” or “total volume.”

3. Do the Math

Divide your total fees by your total sales volume, then multiply by 100 to get your effective percentage rate.

Formula:

(Total Fees ÷ Total Sales Volume) x 100 = Effective Rate

Example:

If your total fees for the month are $450 and your total card sales are $15,000:

($450 ÷ $15,000) x 100 = 3%

In this case, your effective rate is 3%.

Why Does This Matter?

Knowing your effective rate helps you compare what you’re actually paying against the rates you were promised. If the number seems high, you might be dealing with hidden fees—or you could simply be paying too much.

Watch for Rate Increases

Here’s the thing: even if you started with a 3% rate, processors often raise fees over time. You probably get a letter every so often talking about this fee or that adjustment going up. These incremental increases add up, and if you’re not watching closely, your effective rate can creep higher without you realizing it. It’s always a good idea to keep an eye on what you are actually being charged.

With our Dual Pricing model at Adaptive Payment Solutions, you don’t have to worry about these constant rate hikes. It eliminates processing fees and allows you to focus on what really matters—growing your business.

Real-World Example: Traditional vs. Dual Pricing

Let’s break down a typical scenario for an auto repair center processing $100,000 in card sales per month.

Traditional Processing:

  • Monthly Card Sales: $100,000
  • Quoted Rate: 3%
  • Actual Rate (after years of small increases): 3.75%

At the quoted 3% rate:

($100,000 × 0.03) = $3,000 in fees per month

But after incremental increases raise the rate to 3.75%:

($100,000 × 0.0375) = $3,750 in fees per month

That’s an extra $750 each month due to hidden and rising costs—adding up to $9,000 per year that you didn’t plan to spend.

Dual Pricing with Adaptive Payment Solutions:

  • Monthly Card Sales: $100,000
  • Yearly Costs on Dual Pricing: $500
  • Yearly Costs on 3.00% rate: $36,000
  • Yearly Costs on 3.75% rate: $45,000

With Dual Pricing, your customers see both a “Card Price” and a “Cash Price.” When they choose to pay by card, the processing cost is covered. This means you keep the entire $100,000 without losing a chunk to fees.

Why Dual Pricing Makes Sense

  1. No More Rate Increases: You’ll never get another letter about rising fees.
  2. Keep More of Your Revenue: Instead of watching fees eat into your profits, you keep what you earn.
  3. Simple, Transparent Pricing: No more deciphering complex statements or worrying about hidden costs.

At Adaptive Payment Solutions, we make understanding your costs simple—and with Dual Pricing, we help you eliminate them entirely. Want to see how much you could save?

Let’s talk.