Why Do Customers Choose To Buy With Credit Cards?
You hear so much about the risks of credit card fraud and how people naturally overspend when they have access to credit cards. So why is it that so many people continue to use credit cards as their payment method of choice? As a retail store or online business, you may sometimes wonder if it is worthwhile to get a credit card merchant account. It involves additional administration and operational costs. In addition, you could be opening yourself up to the risk of credit card fraud. Indeed, these are all important considerations yet studies show that more and more people are choosing to buy with credit cards. If you don’t accept credit cards, you could be losing out on valuable business. To help you understand the value to your business of becoming a credit card merchant, it can be helpful to look at why people like to purchase using credit cards.
Simple Convenience
These days everyone has gotten so used to an instant lifestyle that convenience is a high priority in life. People do not want to be hassled with unnecessary effort. Whatever you do must be as simple and convenient as possible. Credit cards offer this to customers. When people go to a store to purchase something, it is quicker and easier to simply pull out a credit card to purchase what they want. They do not need to carry cash with them and take the time to count it out when at the checkout counter. They also do not need to first check that they have enough cash in their wallet when making a purchase.
A Level of Security with Credit Cards
Even though credit card fraud is a harsh reality, many people still think that carrying credit cards is safer than carrying cash. Indeed, there is some truth to this statement. Cash in your wallet is largely untraceable. Any thief that steals your wallet can easily go into a store around the corner and make a purchase of their choice. Even though bills are numbered, people very rarely ever make a note of them; it would simply be too much hassle to do so. Cash is a fairly anonymous way of transacting. If someone steals your credit card and tries to make a purchase with it, there are several security mechanisms in place that can prevent the transaction from going through. If the merchant is vigilant about card security, they will check that the signature matches the back of the card. They can also ask for proof of identification to verify that the person presenting the card is the valid card holder. Sometimes if the transaction can be proven to be fraudulent, the card holder can get refunded. It is for these reasons that many people prefer to transact with credit cards believing that they are the more secure method of payment.
Easier to Reconcile Payments and Expenses
Often people find it easier to reconcile monthly expenses when most or all of the transactions are processed through a single credit card. On your credit card statement, you can go through all the items and verify the transactions. If you are a traveling business person and have to submit claims, then it is often easier to do so on a credit card. If you need to split your expenses between different projects or clients then making purchases on credit card is an easy way to do this. Small businesses often use credit cards to make payments to suppliers and to manage their cash flow more efficiently.
Credit Card Loyalty Programs
Many credit card companies have instituted loyalty programs where customers earn points or miles according to how much they spend. Over time, these points translate into benefits that customers can use for purchasing air tickets, vouchers or redeeming gifts. Loyalty programs have become a big incentive for consumers. For the average consumer, it is a way of getting something for nothing. No reward is given for spending cash but by purchasing on a credit card, you could be working your way towards a vacation at the end of the year.
People Are Less Price Conscious When Purchasing on Credit Card
Customers who purchase on credit cards are often less price conscious. If an item is a few dollars more, people often won’t think twice about purchasing it when paying on credit card. If, however, they are paying by cash, they may first check if they have enough cash on them. If they don’t and have to go to the hassle of drawing out more cash then they may simply choose not to purchase the item.
At Card Processing Pros.com we provide credit card processing services and debit card processing, literally setting up hundreds of clients per month to process card payments for storefront, Internet and phone/mail order-based businesses. We also offer services in electronic check and gift card processing. Visit online today.
Tags: business, credit cards, e-commerce, ECommerce, fraud, internet business, small business