--- title: How to Pick the Best Credit Card Processing Rate Plan description: The best credit card processing rates aren't flat rates or bundled rates. Interchange-plus protects your business from inflated charges. image: https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/best-credit-card-processing-plan.svg --- [tel:1-800-601-0230](tel:1-800-601-0230) 800-601-0230 - Features - Solutions - Developers - [Pricing](https://www.payjunction.com/payments/pricing.html) - Resources [See a Demo](https://www2.payjunction.com/tour-payjunction) Features - EXPLORE PRODUCTS [No-code Payments Integration®](https://www.payjunction.com/payments/no-code-payments-integration.html) [ZeroTouch Terminal](https://www.payjunction.com/payments/smart-terminal.html) [Portable Terminal](https://www.payjunction.com/payments/portable-credit-card-reader-terminal.html) - ACCEPT PAYMENTS [Invoices](https://www.payjunction.com/payments/electronic-invoices.html) [ACH Electronic Checks](https://www.payjunction.com/payments/ach-payments.html) [SmartSurcharge®](https://www.payjunction.com/payments/smart-surcharge.html) [Cards on File](https://www.payjunction.com/payments/store-credit-card-info.html) [Rapid Refunds](https://www.payjunction.com/payments/credit-card-refund.html) [Recurring Billing](https://www.payjunction.com/payments/recurring-payments.html) [Ecommerce](https://www.payjunction.com/payments/ecommerce-merchant-services.html) [Mobile App](https://itunes.apple.com/us/app/payjunction/id1324839420?ls=1&mt=8) - EXPLORE CAPABILITIES [Overview](https://www.payjunction.com/payments/payment-processing-solutions.html) [Integration Marketplace](https://integrations.payjunction.com/) [Remote Signature](https://www.payjunction.com/payments/signature-capture.html) [Multi-Location](https://www.payjunction.com/payments/enterprise-payments.html) [Sales Reports](https://www.payjunction.com/payments/sales-reports.html) [Search and Export](https://www.payjunction.com/payments/transaction-history-search.html) [Customization](https://www.payjunction.com/payments/custom-payment-software.html) Solutions - [Veterinary Streamline payment workflows and get paid faster with up-front deposits and payment schedules for high-cost procedures. 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To fully understand the impact a payment processing rate plan has on your bottom line, you need to understand your rate plan options. There are three common rate plans: Flat, Tiered and [Interchange-plus](https://blog.payjunction.com/interchange-plus-pricing-flat) (IC-plus). Unethical Merchant Account Providers will put businesses on variations of another rate plan called [Billback](https://blog.payjunction.com/billback-unethical-billing), which we recommend you avoid all together. For the sake of this post, we're going to focus on the three common plans we initially mentioned. IC-plus offers the best credit card processing rates on the market. But, depending on your processing volume and how established your business is, Tiered or Flat may be a better fit than IC-plus. Here are the pros and cons of each rate plan: |   | Transparent | Consistent Fees | Simple | Quick Setup | Small Business | Merchant Account | | --- | --- | --- | --- | --- | --- | --- | | Tiered | | |   |   |   | | | Flat |   |   |   | | |   | | Interchange |   | | |   |   | | |   | Tiered | Flat | Interchange | | --- | --- | --- | --- | | Transparent | |   |   | | Consistent Fees | |   | | | Simple |   |   | | | Quick Setup |   | |   | | Small Business |   | |   | | Merchant Account | |   | | It’s important for you to know that all credit card processing rates start with the wholesale cost (Interchange) to run the transaction, which varies based on card type and method of transaction. This cost is posted by each card brand to its website. [Visa](https://usa.visa.com/support/small-business/regulations-fees.html#1), [MasterCard](https://www.mastercard.us/en-us/about-mastercard/what-we-do/interchange.html) and [Amex](https://www209.americanexpress.com/merchant/services/en_US/accept-credit-cards?inav=menu_business_merchgetaccount#profession) publicly post their Interchange fees. [Discover](http://www.discovernetwork.com/home/data/acqIntchgLanding.html) does not. Now let’s get into the nitty-gritty of each rate plan. ## Payment Processing Demo Schedule 15 minutes with a payments expert Get a customized PayJunction product walk-through Understand requirements and pricing Determine your SAVINGS! GET DEMO NOW ## Flat The first thing you should know about a Flat rate plan is it’s not the best credit card processing plan for traditional merchant accounts. Flat pricing is only offered by [Payment Facilitators](https://blog.payjunction.com/credit-card-processing-middlemen/) (PayPal, Stripe, Square) who essentially lend out their own merchant accounts to anyone needing to process payments. Because each facilitator works off of a single merchant account, they can’t offer different credit card processing rates to their customers — hence Flat pricing. ![Flat](https://blog.payjunction.com/hs-fs/hubfs/BLOG/BLOG%20IN-LINE%20IMAGES/Flat.jpeg?width=600&name=Flat.jpeg) Flat pricing is a mix of rates and fees that, together, create one fixed rate regardless of card type or transaction method. Flat pricing is unregulated and often increases processing costs, especially for debit card transactions, as you can see above. This payment processing rate plan is not the best credit card processing plan for businesses processing high volume. If you run a large transaction or process a high monthly volume, you’re at risk for long-term fund holding. As businesses grow, they tend to move away from Flat pricing plans. However, because Payment Facilitators do not underwrite their customers before on-boarding, Flat pricing is a good option for new businesses looking to start processing transactions right away. ## Tiered This rate plan bundles transactions into three different tiers (Qualified, Mid-Qualified and Non-Qualified) based on certain criteria. Ultimately, the tier a transaction falls into depends on the level of risk or reward associated with the card. The higher the risk or reward, the higher the cost. This plan isn’t necessarily bad because it’s simple to understand. However, because Tiered pricing is unregulated, some providers will take advantage of this setup and bury excessive markups. ![Tiered](https://blog.payjunction.com/hs-fs/hubfs/BLOG/BLOG%20IN-LINE%20IMAGES/Tiered.jpeg?width=600&name=Tiered.jpeg) Another downside to this payment processing rate plan: Transactions that don't meet their intended tier criteria [can be downgraded](https://blog.payjunction.com/interchange-downgrades-unethical-billing/) to a more expensive tier without notice. For example, if you key-in a debit card but fail to check the Address Verification System, the transaction can downgrade to Non-Qualified, resulting in a higher rate. The majority of businesses are on Tiered rate plans, so odds are you’re on one too. Though a Tiered rate plan is simple on the surface, it makes it very difficult to understand your provider's fees and determine which tier you should truly be paying. Given the lack of regulation, your provider has free range to shift transaction types into any tier. That means more expensive transactions for you, and a larger profit for your provider. ## Interchange-Plus This is the most transparent credit card processing plan with clearly outlined fees and terms. IC-plus is a combination of the wholesale cost to run a transaction (Interchange) plus your provider’s markup. This payment processing rate plan itemizes costs by listing Interchange rates and markups separately. ![Interchange-plus-rate-1 (2)](https://blog.payjunction.com/hs-fs/hubfs/BLOG/BLOG%20IN-LINE%20IMAGES/Interchange-plus-rate-1%20(2).jpeg?width=600&name=Interchange-plus-rate-1%20(2).jpeg) Your merchant statements may seem more complicated with IC-plus because there will be many transaction types listed, each with its own unique IC rate. But the major advantage here is gained transparency into what you’re being charged. You’ll have a true understanding of what you’re paying your provider versus what gets paid to the card brands. ## The Best Credit Card Processing Rates Ensure Savings As we mentioned earlier, the rate plan that best fits your business depends on whether your business is new and how much you process in credit card transactions. Flat rate plans are simple, and have a quick set up, but are expensive. Tiered rate plans can be more cost effective than Flat, but they take longer to set up and give your provider room to hide fees. For mature businesses looking for transparency and next-day funding, IC-plus is the way to go. ![Plan Comparison](https://blog.payjunction.com/hs-fs/hubfs/BLOG/BLOG%20IN-LINE%20IMAGES/Plan%20Comparison.jpg?width=600&name=Plan%20Comparison.jpg) We understand every business is different, but all strive to save where they can. Get a professional analysis of your current merchant statements and find out if it’s time for a new payment processing rate plan. Be proactive and take the time to determine which rate plan is best for you. ## Take back your finances with a free rate analysis. ## [![START SAVING](https://hubspot-no-cache-na2-prod.s3.amazonaws.com/cta/default/635739/b75779cc-711d-4223-a356-bca49bd62b12.png)](https://hubspot-cta-redirect-na2-prod.s3.amazonaws.com/cta/redirect/635739/b75779cc-711d-4223-a356-bca49bd62b12) What payment processing rate plan are you on? Will you look into your current rate plan and see if there’s room for savings? Tell us more in the comments section below! [Rates](https://blog.payjunction.com/topic/rates) [Transparency](https://blog.payjunction.com/topic/transparency) --- ##### [![A Guide to Payment Processors](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/credit-card-processing-middlemen.svg) A Guide to Payment Processors](https://blog.payjunction.com/credit-card-processing-middlemen) ##### [![How Auto Shop Software Helped Buellton Garage Boost Customer Service](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/auto-shop-software-buellton-garage.svg) How Auto Shop Software Helped Buellton Garage Boost Customer Service](https://blog.payjunction.com/auto-shop-software-buellton-garage) ###### About Author ![Picture of Ursula Librizzi](https://blog.payjunction.com/hs-fs/hubfs/Ursula_Librizzi.jpg?width=200&height=200&name=Ursula_Librizzi.jpg) ### Ursula Librizzi Ursula is the sales and marketing operations manager for PayJunction. She oversees daily marketing tasks and liaises between the sales and marketing departments. ###### Related Posts ## [![eCommerce Merchant Account: 6 Key Tips for Choosing](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/ecommerce-merchant-account.svg) eCommerce Merchant Account: 6 Key Tips for Choosing Ecommerce presents exciting opportunities for business owners: to better meet the needs of existing customers, to tap into new markets and to grow the value of individual transactions over brick-and-mortar purchases.](https://blog.payjunction.com/ecommerce-merchant-account) ## [![What Is Credit Card Interchange?](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/interchange-definition.svg) What Is Credit Card Interchange? Credit card Interchange is the wholesale cost to process a credit card transaction and is typically comprised of a percentage of the transaction plus a fixed dollar amount (e.g., 0.5% + $0.10). The cost directly relates to the level of risk or reward associated with the transaction. For example, a business rewards card will have a higher Interchange cost than a debit card.](https://blog.payjunction.com/interchange-definition) ## [![How To Manage the Cost of Payments When Interchange Rates Increase](https://blog.payjunction.com/hubfs/BLOG/FEATURED%20IMAGES/interchange-rate-increase.svg) How To Manage the Cost of Payments When Interchange Rates Increase The four card brands—American Express, Discover, Mastercard and Visa—assess Interchange fees on card payments to compensate the card-issuing banks for processing transactions. Fees are typically reviewed and adjusted once or twice a year, in April and October. In 2020, due to the COVID-19 pandemic, the card brands suspended most practices so as not to further burden businesses hit with closures, labor, supply chain issues and other challenges.](https://blog.payjunction.com/interchange-rate-increase) ## Meet a Payment System You’ll Love - ###### FEATURES [No-code Payments Integration®](https://www.payjunction.com/payments/no-code-payments-integration.html) [ZeroTouch Terminal](https://www.payjunction.com/payments/smart-terminal.html) [Portable Terminal](https://www.payjunction.com/payments/portable-credit-card-reader-terminal.html) [Invoices](https://www.payjunction.com/payments/electronic-invoices.html) [ACH](https://www.payjunction.com/payments/ach-payments.html) [SmartSurcharge®](https://www.payjunction.com/payments/smart-surcharge.html) [Cards on File](https://www.payjunction.com/payments/store-credit-card-info.html) [Recurring Billing](https://www.payjunction.com/payments/recurring-payments.html) - [Ecommerce](https://www.payjunction.com/payments/ecommerce-merchant-services.html) [Customization](https://www.payjunction.com/payments/custom-payment-software.html) [Remote Signatures](https://www.payjunction.com/payments/signature-capture.html) [Rapid Refunds](https://www.payjunction.com/payments/credit-card-refund.html) [Multi-Location](https://www.payjunction.com/payments/enterprise-payments.html) [Sales Reports](https://www.payjunction.com/payments/sales-reports.html) [Search and Export](https://www.payjunction.com/payments/transaction-history-search.html) [Mobile App](https://itunes.apple.com/us/app/payjunction/id1324839420?ls=1&mt=8) - ###### BUSINESS SOLUTIONS [Auto Dealers](https://www2.payjunction.com/automotive-merchant-services) [Veterinary](https://www2.payjunction.com/payment-processing-veterinarians) [Dentistry](https://www2.payjunction.com/payment-processing-dentists) - ###### RESOURCES [Product Overview](https://www.payjunction.com/payments/payment-processing-solutions.html) [Integrations](https://integrations.payjunction.com/) [Blog](https://blog.payjunction.com/) [Guides](https://guides.payjunction.com/) [Support](https://support.payjunction.com/) [Service Status](https://status.payjunction.com/) [Tutorials](https://blog.payjunction.com/tag/pj-university/) [API](https://www.payjunction.com/payments/payment-api.html) - [Trust Center](https://trust.payjunction.com/) [Request a Demo](https://www2.payjunction.com/payjunction-demo) [Pricing](https://www.payjunction.com/payments/pricing.html) [About Us](https://www.payjunction.com/payments/about.html) [Careers *HIRING*](https://www2.payjunction.com/careers) [Press](https://media.payjunction.com/) - ###### RESOURCES [Integrations](https://integrations.payjunction.com/) [Guides](https://guides.payjunction.com/) [Tutorials](https://blog.payjunction.com/tag/pj-university/) [API](https://www.payjunction.com/payments/payment-api.html) [Request a Demo](https://www2.payjunction.com/payjunction-demo) [About Us](https://www.payjunction.com/payments/about.html) [Careers *HIRING*](https://www2.payjunction.com/careers) [Press](https://media.payjunction.com/) [Trust Center](https://trust.payjunction.com/) [Service Status](https://status.payjunction.com/) - ###### BUSINESS SOLUTIONS [Auto Dealers](https://www2.payjunction.com/automotive-merchant-services) [Veterinary](https://www2.payjunction.com/payment-processing-veterinarians) [Dentistry](https://www2.payjunction.com/payment-processing-dentists) ##### 800-601-0230 SIGN UP FOR OUR NEWSLETTER  Become a better advocate for your business. 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