Sneaky charges bite

If your credit card statements are rife with odd or inexplicable charges, a few simple changes could help you save.

We noticed that surcharges on our merchant credit card statements sometimes added as much as $100 to $200 a month to our processing fee. Our credit card processing fees cost us over $42,000 in 2005, so even a small change in the effective rate makes a huge difference. So we examined the system and discovered these ways to save:

1. Re-program your credit card processing terminals so you provide all the necessary information. For example, if a certain card requires address verification and our terminal doesn't ask for that when you slide the card, the company tacks on a surcharge—in our case as much at $52 for four mysterious transactions. We re-programmed our terminals by downloading necessary updates over the telephone.

2. Know when to let go. Some of the charges on our current bill are really for transactions that were completed on the previous month's bill, making reconciliation impossible. Control the costs you can, but consider the costs of your time if you're trying to chase down every dollar.

3. Work with a good company. A simpler format and fewer options may mean a better deal for you in the end. For example, the merchant pays extra for cards that offer the user rewards. The merchant can't control those fees, and neither can you. But you'll at least know what you're up against if you understand your merchant's credit card processing charges.

4. Compare with a colleague to get a benchmark. If you're not sure whether your total fees seem fair, periodically compare your practice's effective rate—the total processing charges (the difference between the total amount processed and the deposit) divided by the total amount processed—with other hospitals. Be sure these practices are processing about the same amount monthly as your practice because the rate is usually lower for those that process more total revenue.

Lynette J. Ott keeps an eye on expenses at Barton Heights Veterinary Hospital in Stroudsburg, Pa., where she's the practice manager.