Consumers may be drawn to credit cards that claim to offer zero percent interest rates, but with the current economic environment still uncertain, they may want to stick to forms of payment that don't call for them to be pay later or be surprised by fees or suddenly raised interest charges. This makes it essential for small-business owners to be prepared to provide the best service and cut down on processing time with check scanner machines.
Consumers cope with high interest, fees
While an advertisement or envelope for a new credit card may advocate its low interest rate, many consumers do not realize the advertised rate may not apply to them, or could be raised after a certain period of time. This can force consumers to end up paying much more than they had anticipated for a purchase.
According to a recent study by CardHub, average interest rates for consumers with fair credit have jumped more than 3 percent to 20.17 percent compared to the fourth quarter of 2012. Those with good and excellent credit saw slight declines in monthly interest rates - 17.07 percent and 12.79 percent, respectively. While these expenses may have dropped, they're still high, especially considering the study found the average credit card balance is nearly $7,000. It is even more expensive when compared to checks and cash, both of which don't call for any interest payments.
Unfortunately, interest payments aren't the only fee credit card users may be responsible for. Cash advance fees shot up to an average of $10.90, a year-over-year increase of 22.61 percent. Balance transfer fees and foreign transaction fees dropped slightly, but are still at 2.8 percent and 2.24 percent, respectively.
Consumers turn to low- or no-cost options
Not all consumers can afford monthly interest rates in the double digits, particularly if their credit history has its share of ups and downs. As a result, many people may be foregoing credit altogether and opting for checks, which don't require them to pay any interest and don't accumulate the fees credit cards do.
To accommodate these customers, as well as speed processes, companies may find it beneficial to invest in the latest check scanners that will allow them to make deposits in a more timely fashion and encourage consumers to improve their spending habits and make transactions that don't call for interest or extra fees.
June 5, 2013