Why Avoid Credit Card Terminal Leases?

Many small businesses look at leasing high price equipment, such as a piece of equipment that may cost $10,000. But would you lease a cash register that costs $400? Most would say no! Why would you then lease a credit card terminal that can cost less than $200?

Credit card terminal leases can range from 12 to 48 months. They generally start at $19.95 a month and go up from there. If you are on a 48 month lease paying $24.95 a month, that is $1,197 in payments! 

Many merchant account providers claim that lease payments are a deduction, but we would point out that a purchase would be deductible as well. You do not receive any more tax advantages by leasing vs buying outright.

Here are a few cold hard facts about leasing:

1. Many leasing companies will continue to charge you after the end of the lease unless you call and cancel.
2. They are binding regardless of your circumstances. You cannot cancel before the lease ends.
3. Equipment insurance is required, adding extra monthly fees.
4. You must return the terminal that you have made payments for during the past 48 months. Most leases have a buyout option, but this also requires more money to fully own the unit outright.