Not long ago a good friend of mine shared with me a story about how he had signed up with Costco for merchant services rather than choosing another merchant account provider.

Well, here's where he ran into a problem.

Costco is not in the merchant processing business. Or the credit card processing business. Or whatever you want to call it.

They basically act as a marketing organization for NOVA, the real processing company behind the scenes (by the way, most likely your bank does the same thing).

The reason they "partnered" with NOVA no doubt involves what their cut, or kickback will be. They could choose from among a number of the "mega processors," but I guess NOVA cut them a good deal. And who can blame them.

Now, back to the story. The issue that my buddy ran into was the "introductory rate" he was offered when signed on the dotted line. It seemed like a good deal at the time. Almost too good to be true.

So what happened?

Well, within a month they were raising his rates. And that, when dealing with NOVA (or any of the mega-processors for that matter), there is no negotiation on rate and fees. It just doesn't happen.

Perhaps the local rep (or call center) will tell you that they can do such and such.

But it just ain't happening. And I'm speaking from experience on this one. Their goal, once you're "referred" to them, is to close the sale. Period. And they'll say anything to you that gets their task accomplished. Why?

Because, it will take at least a month (or two) before you notice anything wrong on your merchant statement (provided, of course, that you even look at it!). And if you finally call to complain -- meaning you did notice that the statement you received did not match the VERBAL promises made in person or on the phone -- they already got you.

That's right.

When you sign the agreement or application, think CONTRACT. And to get out of it, you'll have to pay an "early termination fee" (that's what happened to my friend).

These companies know that most people won't pay to get out of the deal. They figure you'll come to the conclusion that if Costco can hose you, everyone and anyone out there will do the same. So you'll complain, but you won't act to make a change.

And that's what they're counting on. Which is why NOVA can give such a sweet deal to Costco. Just thought you'd like to know.

So when you want to know how to find the best merchant account, be sure you know which questions to ask so that you can make an "apples to apples" comparison for yourself. Download your free report and get the "17 Point Checklist" so that you'll know the right questions to ask next time around.