Choosing a credit card processing company is a tricky business. On the one hand, you want to get the best service at the cheapest price. On the other hand, you want to move quickly so you can concentrate on the business of selling your stuff.

Like most people, you may default to assuming all companies will be transparent and straightforward with you. However, if you want to protect yourself and your business, you need to be savvy. To that end, we present you with a list of the seven deadly sins of credit card processing – mistakes you need to avoid in order to get a good deal and save money.

1. Signing a Contract You Don't Understand. This may be the single most common and expensive error you can make. Even a reputable credit card processing service's contract may contain "gotchas" in terms of fees or conditions you thought didn't apply to you. Among these are lengthy terms with automatic renewals, early termination fees (which often have a different name), personal guarantees or fees for additional services you don't need. If it's in the contract, you're responsible for it, so make sure you not only know what each fee is but when it applies to you. If the sales rep offers to waive something for you, get it added to the contract before you sign it.

2. Not Doing Your Research. With hundreds of credit card processing companies to choose from, you don't have to settle for the first company that accepts you as a client. Look at several companies and consider several pricing models before deciding on which service is best and which fee structure is cheapest for your specific business. You can start with our reviews of credit card processing and mobile credit card processing companies to learn more about pricing models and see lists of the top retail and mobile processing companies, some of which also work with point-of-sale and online systems.

3. Not Negotiating for Better Terms. Credit card processing companies are eager to do business with you, and it's a financial sin not to take the time to negotiate for better rates, fees, and terms. Some things you can ask for are removal of specific fees, such as setup fees, annual fees, PCI-compliance fees and monthly minimums. You can ask for pricing quotes for both interchange-plus and tiered pricing models, and you can even ask for lower rates – especially if you've already received a lower quote from another company. You should always request a contract with month-to-month service and no early termination fees so you are free to switch services if the company isn't meeting your needs or you find a better deal elsewhere. Download our free worksheet, "How to Negotiate with Credit Card Processing Companies: The Four-Step Plan of Attack" to use as a guide for your calls. Be sure that any promises made get put in writing and then in the contract itself before you sign anything.

4. Making a Volume Commitment. Some credit card processors have a minimum volume commitment, often referred to as a monthly minimum. This means you have to process a certain dollar amount in credit card transactions each month or you owe the company for income it lost in unrealized fees. This could be the difference between what you made and the agreed-upon minimum, a set monthly fee or a fine that exceeds that difference. Be sure to ask how much you need to process in order to meet the minimum, and unless you're confident of steady sales that exceed that amount, negotiate for a lower amount or look for another processor.

5. Agreeing to Cancellation Fees. The best credit card processing companies provide service on a month-to-month or a pay-as-you-go basis, but others have three-year contracts that automatically renew for additional two-year terms. Be sure to read the contract and look for fees that are worded differently but mean the same, such as "early deconversion fee."

If you choose a service that requires you to sign a lengthy contract and you wish to cancel your account, you can anticipate paying a hefty cancellation fee since the credit card company expected to collect a certain amount from you for the duration of the contract. Even though you may cancel for a multitude of reasons, from going out of business to problems with the processing service, you'll still be expected to pay this fee if it's in the contract. Further, cancellation fees are often prohibitively expensive, especially if you cancel early on; some can cost thousands of dollars if the contract includes a clause for liquidated damages.

6. Not Reviewing Your Monthly Statements. After you begin processing, you need to examine your credit card processing statement every month to find out how much you're truly paying for your credit card processing service. You may discover that you run more debit cards than you estimated and that tiered pricing plan with the great teaser rate is saving you money after all. Or you may find that customers prefer to use premium rewards cards and you're consistently paying the expensive non-qualified rate for most of your transactions, in which case, it may be time to try a different pricing model or renegotiate your rates with your current processor, or you may need to start looking around for better rates elsewhere.

Most contracts don't include a rate guarantee, so it's up to you to monitor your rates. Checking your statements monthly helps you identify if your rates increase or if any nonstandard fees are added to your statement. It's important to find these changes as soon as they occur so you can promptly call your sales rep to see if your rates can be rolled back or if the fee can be removed. This will save you the frustration of discovering that you've been paying higher rates or nonstandard fees for months or even years.

7. Ignoring PCI Compliance and Data Security. Data security is a critical issue in credit card processing and you need do your part to prevent data breaches and credit card fraud. The best way to do this is to follow the data security standards set forth by the Payment Card Industry (PCI DSS) and maintain your PCI compliance. When you, as a merchant, ignore the security of your customer's financial and personal information, you open them to becoming fraud victims and you open yourself up to fraud liability and fines. Consider the following statistics from processing giant First Data and the PCI Security Standards Council:

• 90 percent of data breaches affect small businesses
• $36,000 is the average cost of a security breach to a small business
• 70 percent of small businesses that experience a data breach go out of business within six months
• 96 percent of the merchants that experienced data breaches in 2011 were not PCI compliant

You should also protect yourself against counterfeit fraud liability by upgrading to EMV-compliant card readers. As of October 2015, the liability for counterfeit fraud occurring at the point-of-sale shifted to the party that is the least EMV-compliant. If your terminal or card reader can't accept the chip cards, that's you. Although it can be expensive to purchase new equipment, it's an investment against fraud.

They say the road to hell is paved with good intentions, and certainly, you have the best of intentions when it comes to selecting and working with a credit card processing company. Avoiding these seven deadly sins can help you to have a more heavenly – and profitable – experience accepting credit and debit cards from your customers.

Contributing Reviewer: Karina Fabian

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