Question

A major advantage of national credit cards to retailers is that there is no charge to...

A major advantage of national credit cards to retailers is that there is no charge to the retailer by the credit card companies for their services. True or False

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Answer #1

Solution

False

This statement is false as the national credit cards issued by various organizations do charge 2% to 6% of the invoice price for providing the credit card services. The advantage of these cards to retailers is that the issuer undertakes the credit investigation of the customer, undertakes the collection process, and also absorbs any losses if any. On the other hand, the retailer receives the cash quicker. But the issuer will charge some fees for these services thus there is a charge to the retailer taken by card companies

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