4 Reasons Why You Should Never Lease a Credit Card Machine
Would you ever pay over $3,500 for something that only retailed for less than $425? We wouldn’t either, but believe it or not, if you are currently leasing a credit card terminal or are thinking of leasing one, this is what you could be paying or more!
We’ve worked with many shocked business owners when we actually tell them how much they are paying and how much the equipment is really worth. We wanted to write this article to hopefully save other business owners out there from making this same leasing mistake. Here are our top 4 reasons as to why you should never, ever lease a credit card machine.
1. Cost. We’ve seen lease costs range from $29.95 to over $100 per month for 3-4 years, which could be upwards of $4,000. This is astronomical when the average terminal cost is around $450.
If money is tight and you don’t have the extra funds to purchase the equipment, ask your processing provider if payment plans are available. To earn your business, they would most likely allow you to pay a certain amount each month for a few months.
2. Strict lease agreements. Just like any other agreement, a lease agreement can be broken but you will pay. Whatever your current situation is, it’s more than likely that these lease company’s won’t care, and therefore, won’t budge or cut you any deals.
The upside is that typically terminal leases are separate from a processing agreement. Meaning you can switch providers when you would like and not break your terminal lease agreement.
3. You’ll never “own” the terminal. Just like a vehicle lease, when your lease term is up, you don’t actually own the equipment. At the end of the agreement, you are given a choice to continue the lease or purchase the terminal for “fair market value.” The so called “fair market value” could be just as much as if you purchased the terminal in the beginning.
4. The payments don’t automatically stop. Even though you may have signed up for a 36 month lease, your payments won’t automatically stop after 36 months. YOU must call the leasing provider and either terminate the lease and give back the equipment or buy it outright from them for “fair market value.” This being said, it’s important to keep track of your lease agreement, and you must remember to initiate the call when the agreement is up.
If you have questions or are concerned with the costs of the processing program that you are currently using, please give us a call. We’d be happy to look over your current program at no cost. To learn more about the author of this article and CHIPD, please visit www.chipdpay.com.