How card processing fees actually work
Every card sale gets a slice taken off the top before the money reaches your account. That slice is built from three parts: interchange (paid to your customer’s bank), assessments (the card network’s cut), and your processor’s markup. Interchange and assessments are fixed for everyone; only the markup is negotiable.
Most processors quote that total as a percentage plus a fixed per-transaction fee — the two inputs above. A common US flat rate is 2.9% + $0.30 online. On a $40 sale that’s $1.46; on a $5 sale it’s $0.45 (9% of the sale, because the fixed 30 cents dominates small tickets). That’s why your effective rate moves with your average ticket size.
Compare effective rates, not headline rates. Take one month’s total fees (every line, not just the percentage) and divide by total card sales. That single number is the only fair way to compare two providers.
Effective rate by ticket size
The headline rate and your real rate are two different numbers. At a typical 2.9% + $0.30, the fixed 30 cents dominates small tickets and all but disappears on large ones — so your effective rate slides with your average sale:
| Sale amount | Fee (2.9% + $0.30) | Effective rate |
|---|---|---|
| $5 | $0.45 | 8.9% |
| $20 | $0.88 | 4.4% |
| $50 | $1.75 | 3.5% |
| $100 | $3.20 | 3.2% |
| $500 | $14.80 | 3.0% |
This is why average ticket size matters more than the headline rate. A coffee shop running $6 sales pays a far higher effective rate than a furniture store running $600 ones — on identical pricing. Raising your average ticket (bundles, minimums) is one of the few ways to cut the rate without switching processors.
Flat-rate vs interchange-plus
Flat-rate (Stripe, Square, PayPal) charges one blended percentage on every card. It’s simple and predictable, with no monthly fee — but you quietly overpay on cheap debit. Interchange-plus passes the real interchange through at cost and adds a fixed markup (e.g. interchange + 0.30% + $0.10). It’s the most transparent model and usually the cheapest once you’re doing real volume — interchange-plus typically starts winning around $4,000/month on Stripe, $7,500 on Square, and $10,000 on Clover.
Use the monthly volume field above to see your projected annual cost at the current effective rate — then compare it against an interchange-plus quote.
Frequently Asked Questions
How does this credit card processing fee calculator work?
Enter the sale amount and your rate as a percentage plus a fixed per-transaction fee (or tap a preset). The calculator multiplies the amount by the percentage, adds the fixed fee, and shows the total fee, your effective rate, and what you keep — plus an optional monthly projection.
What rate should I enter?
Use your processor’s published rate. Common US flat rates are 2.9% + $0.30 online and 2.6% + $0.15 in person; on an interchange-plus plan, enter your blended effective percentage. If you are not sure, check a recent statement or one of the per-brand calculators linked below.
What is an effective rate?
It is your total fees divided by total card sales — the single number that folds the percentage, the fixed fee, and any add-ons together. It is the honest way to compare two processors, since the fixed fee makes small tickets cost a higher percentage.
Why does my effective rate change with the sale amount?
Because of the fixed per-transaction fee. At 2.9% + $0.30, a $100 sale costs 3.2% but a $5 sale costs 9% — the 30 cents is a big share of a small ticket. A larger average ticket pulls your effective rate down toward the percentage.
How do I get a lower processing rate?
Ask for interchange-plus pricing once you have steady volume, run more sales in person and on debit, send full card data (AVS/CVV) so payments qualify for cheaper interchange, and negotiate the processor markup. Our processing-fees guide has the full playbook.
What is a good credit card processing rate in 2026?
For flat-rate processing, 2.6% + $0.15 in person and 2.9% + $0.30 online are the standard benchmarks. Measured as an effective rate, most small businesses land around 2.5%–3%; once you have steady volume, an interchange-plus plan can pull that down toward 2.2%–2.5%. If your effective rate is above about 3.5%, you are probably overpaying and it is worth shopping or renegotiating.
Can I pass the credit card fee to my customers?
In most US states, yes — you can surcharge credit card payments to recover the processing cost, but the rules are strict. Surcharging debit cards is banned nationwide under the Durbin Amendment, the surcharge is capped (Visa 3%, Mastercard 4%, with lower limits in some states), and you must post signage and show it as a separate line item on the receipt, plus give the card networks 30 days’ notice. A handful of states — including Connecticut, Massachusetts and Maine — ban credit surcharging outright, so check your state first. A cash discount is an allowed alternative everywhere.
What actually makes up the rate you pay
A card processing rate is rarely one number. Underneath it sit three layers: interchange, which the card-issuing bank keeps and is set by Visa and Mastercard; the assessment, a small slice the card network takes; and the processor’s own margin on top. Flat-rate providers such as Square and Stripe roll all three into a single headline like 2.9% + $0.30, while interchange-plus pricing shows them separately.
Which is cheaper depends on volume and card mix. Flat-rate pricing is predictable and wins for smaller or newer businesses; interchange-plus usually costs less once monthly card volume is high enough that the transparency outweighs the complexity. Two extra costs commonly stack on top: international cards and currency conversion each add roughly 1–1.5%, and in some US states a business may legally surcharge credit-card payments to pass the cost on. Enter your average ticket and monthly volume in the calculator above to see the all-in cost under each model.