Why You Shouldn’t Lease a Credit Card Machine

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credit-card-terminal-picAlthough the practice of leasing has declined in recent years, some sales reps will still try and convince you that leasing is the right option for you. They’ll tell you a bunch of great things like, “you’re not required to pay any money up front,” or “you’re guaranteed a replacement terminal if yours breaks.”

Those selling points might sound good, but I’m here to tell you that they’re not. I’m here to tell you that a terminal lease will end up costing you hundreds, if not thousands of dollars. I’m also here to tell you that with the fees you’ll end up paying to lease a terminal, you could purchase that same machine in a matter of months…if not immediately. Heck, you could probably buy more than one.

Additionally, if you lease a terminal you may also be required to purchase equipment insurance, which is another added cost. And, not to mention, you may even have to return the damn thing at the end of your lease. WTF?!

Why Buying a Credit Card Machine is the Best Option

Listen, a terminal lease carries with it a 48 month lease agreement (which is the usual term). The cost of that lease can run anywhere from $50-$100/month. That is a LONG time to be paying for a machine that doesn’t cost more than $400 these days. Why not just purchase one outright?

The cost of the purchase is completely tax deductible, and you won’t get stuck paying $2400 for a machine that costs $400. That’s 600 percent in interest over the course of four years. Yikes!

Even if you can’t afford to pay cash for your credit card machine, you can just charge it to a business credit card. The interest paid is still tax deductible, and assuming you have a 14 percent APR, if you pay the same $50/month toward your credit card balance that you would have paid toward your lease, you’ll have the terminal paid off in less than nine months. That’s a savings of nearly $2,000 that can be better directed into developing and expanding your business. It’s really a no-brainer.

The “Free” Credit Card Machine

Some processors offer up “free” terminals to their merchants, but as we all know, there is nothing free in this world. Generally, a free terminal carries with it a yearly “Terminal Replacement” or “Warranty” charge of anywhere between $50-$100/year. That’s still much less than what a lease would cost you though.

So, if you can’t buy one, see if your processor will give you one for “free.” Both CDGcommerce and Gotmerchant.com have a free terminal program that’ll run you about $79/year.


If you’re already locked into a lease, you most likely won’t able to break the contract. As I mentioned before, a lease term is usually 48 months, so you’ll have to find out when that term ends before you can walk away without a penalty.

If you’re not currently in a lease, but are considering one, don’t be deceived by exaggerated claims from sales reps. Instead, do your own homework and calculate the total cost of leasing vs. owning. I’m sure you’ll find that the best and most affordable option lies in ownership.

Amad Ebrahimi
Amad has worked in the eCommerce and online marketing world since 2002. He started as an eBay seller, then slowly graduated to building & marketing his own websites and consulting others to do the same. He founded Merchant Maverick out of frustration with all the misinformation and shady tactics that he encountered when trying to find a merchant account for his and his client's businesses. He's the man behind most of the merchant account reviews, and articles posted on MerchantMaverick.com. Have any questions related to credit card processing? Talk to him.
Amad Ebrahimi
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    Great information , my experience with First Data was horrible from the start. They have a third party person doing sales that promise you all this stuff cash back, etc. Then when you contact the company you find out that the guy that sold you the services doesn’t work for them directly. Took me a year to get the cash back. Then when the equipment has a problem they told me I didn’t have a warranty. I said you own the equipment they then connect you to the leasing department. different division same company. You spend hours going back and forth meanwhile your machine isn’t working and you can’t process your sales. Horrible Horrible Service. I finally got lucky and got a woman on one of my many calls that help me solve my problem.
    My question to you do you know companies that sell equipment in Canada?

      Jessica Dinsmore

      Hi Franco,

      Give Helcim a try. I think they’ll be able to help you out with equipment.

        T Henry

        I’m an agent in this industry and would like to offer a bit of advice. This article is 100% correct. Leasing is absolutely geared toward making a huge profit without you knowing it. Leasing is not typically offered by the processor, it is offered and sold through its agents. All the leasing company does is follow the signatures that the agent provides them, so in their eyes, nothing bad has happened. Before you pull the trigger on signing with any merchant service company. Make sure to read up on reviews of not just the company, but on the agent. Find an agent that is reputable, AND NOT only short term in the business. Get references from them, ask local business owners who they use and who’d they recommend. Find out if that agent will give you interchange pricing and offer a no contract merchant service agreement. Think of this like a car sale. There’s shady used car guys and there’s honest used car guys that back up their word. This industry works in the same manner. There’s no certification required to be an agent to do this, However there is a certification program out there that you can look into. Look up ‘electronic transaction association certified payment professionals’. There are a list of agents in there that will more than likely far exceed your expectations.

        To all business owners these are the demands you need met.

        Can you buy the equipment
        Can you get no contract on the merchant agreement
        Can you waive the annual fees (if there are any)
        Can you have interchange pricing (don’t go any higher than 25 basis points)
        Make sure you know how statements are given (most places are paperless so online access needs to be obtained)
        Demand no monthly minimum on your agreement (this is a sneaky way to get extra money out of you)
        Demand a copy of the entire agreement WHILE THE AGENT IS THERE, this also includes the terms and conditions packet (required to be given by all agents). Open that terms and conditions packet and look for ‘term and termination’ a lot of agents say ‘no contract’ but they have been known to lie about it.

        Happy hunting to all


          Randy Ruiz

          In your opinion who has the best rates for a merchant in using credit card transactions

            T Henry

            Randy, every merchant agent and company works a little different, ‘best rates’ is a very vague request. How about finding an agent that has a great reputation that works well with the local businesses. A good agent will price you good and treat you well when an issue arises. I know this is a very old post but thought i’d throw this in there.

              Umut Kokangul

              I signed lease with a credit card merchant. It was 40 months lease that I had been told if I do the lease for 60 months I will get better deal with fees. I told him it is all nice but what will cost me to get out of lease ? He showed me the part saying $299 early termination fee so I signed it. After 3 yes I wanted to close the account with merchant they took $950 from my account and I am still paying $160 for terminal I do not use. I am planning to sue the company for sending me representative who mislead me to sign the lease. Any advice on that ?


                The sales reps take advantage of business owner that usually just want to start getting money to there account not thinking how much of that money will be pocketed by the merchant services .some business owners are just happy to have a prossessor because they think they might not even be able to accepte cc .so there is a lot of business owners that don’t have a slight idea about the process .and even some smart business owners think about bottom line and cancelation fees but forget about other fee since most sales rep flat out lie lie lie.and when you call them to explain a charge they refer you to customer service which give you flat out truth about the charges or about the contract you didn’t have the time the mood the desire to read.so read those contract read reviews know what your business exactly needs before you set up an appointment with one of those reps.good luck everyone.


                  I need advice. The Rep. of This merchant Company trick me when reading my present statement and make me belive that i was paying 3000.00 a Month on a 40000.00 credit card sales, and that he was going to save me 1700.00, but now that i sign the contract and the lease company by phone, i find out that i am only paying 950.00 with my present company and i havent use the equipment . How can i get out of this contract . they say it was a mistake reading the statement and i have to pay a termenation fee of 495.00.

                    Ryan Schwoeble

                    You need to contact a Business Solutions company that is wholesale and is able to buy out leases and has everything in writing with guarantee letters from the president of the company. Merchant processing companies do not offer this. Complete Business Solution companies do. I owned a business and have dealt with many different companies. When I sold my company, EIR Electric Pittsburgh PA, I became a consultant for such a company to help business owners out of these shady situations provided by these processing companies.

                      Gary Tracey

                      I was told I was not signing a lease but just agreeing to the % to take cards and now that switched to another company I have a collection agency trying to get $ 2,600 for the rest of a lease I didnt even no I was signing, I was told there was NO contract or lease but it looks like I sign one without my knowledge, this company was Electronic Payment Solutions the machine I thought was theirs was First Data Global Leasing,I am fighting this all the way to the end.

                        Audie Courtney

                        After nearly two years of good service they flopped, sent a letter saying our terminals were no longer useable, after they had disconnected them from service and when we called to report the problem no one would respond back, we were told at least 10 times we will call you back and no one ever called back. We had 20 payments that could not be processed so we had to go to a different company and machine. after 3 to 4 weeks we get new machines show up at our office. we had called and left a message that we were canceling due to the bad service. at that time we were told we were under a 4 year contract and could not cancel, were are the customers rights when the company fails on there part. I was told it would cost $395.00 to cancel the contract. and then had to pay the rest of the lease on 5 machines that I did not order. The machines I have the lease on are no good. looks like another small business just got screwed over. I WOULD NOT RECOMEND THEM TO ANYONE. ANY SUGGESTIONS ON WHAT TO DO?


                          I am in the process of looking for another merchant service provider. When we bought our taxi business a few years ago, we inherited a contract with a less than stellar provider and a very nasty third party lease with unspeakable terms. The lease on the terminals should be up in a few months. I found your site today and have already learned so much about what to look for in a provider. But it looks like I have lots of homework to do still. I would prefer to purchase (long range?) wireless terminals for our small fleet but don’t know where to start. Which models are a good fit? I noticed your site was US based and I am from Canada. Do you have any knowledge about Canadian providers or can you direct me to a reputable source for information? Will terminals purchased from eBay (US) work with Canadian providers, that is, if they will allow that at all? I would like to thank you for a very informative site that helps take away a bit of the pain of finding a new POS provider. Keep up the great work!

                            jeffrey Santisi

                            Wow! The horror stories continue. I spent 10+ years in merchant services and I’m totally disgusted with all the thugs, thieves and losers that now populate this once great industry. Merchant Service companies and reps should be required to get licenses like insurance and if they lie or deceive they lose license and are fined. That would knock out the slime and tremendously reduce a merchant’s expense

                              Dawn Kee

                              Can I buy an I CT250 terminal from someone besides Elavon? Theirs are ridiculously expensive!

                                Tom DeSimone

                                Hi Dawn,

                                You can absolutely buy it from someone other than Elavon. The terminal will just have to be reprogrammed to work with your processor. Many processors will do this for free. Have you checked out Helcim? They set up accounts with Elavon, but might be able to get you a lower rate than you have now, plus their terminal sales/rentals are fairly priced. Just something to consider. Otherwise you can buy the terminal anywhere, from Staples to Amazon.com to eBay.


                                  Mike Firestone

                                  There are also Independent Sales Organizations out there that will require you to upgrade your terminal, which may or may not be legitimate. But they will charge you a ridiculous amount of money for the terminal and if you try to buy the terminal from a reputable vendor, then they tell you they will charge you $100.00 or more to download the credit card application into the terminal. We all know they are making money on the transactions to begin with and the application download is generally free. Just another way to grab a few bucks.


                                    There are a few Companies that are selling their leases at $159.00 to $499.00 monthly! They tell them they get a big discount on there credit card processing when it all comes down to it, they were paying more for the card processing than they were before! To get out of the lease the cost is over $6000.00! That is unfair business and ROBBERY!

                                      Moaz Alibhai

                                      If you buy a terminal and later decide to switch to a different service provider, will the terminal work with the new provider ?

                                        Ellen Karasek

                                        This website is full of remarkable advise for any business owner. Unfortuntely for me, I only found it ‘after a few hard knocks’ with a merchant terminal provider (you strongly suggested to avoid doing business with).
                                        I want to switch providers, but as a Canadian Business owner my options are limited.
                                        I chose to purchase my terminal several years ago (due to the unwanted surprises of a lease). I don’t know the steps to take to switch to another merchant provider. The sales rep at the time insisted there were no yearly fees, yet in the past 3 years they’ve helped themselves to a total of $380. referred to as ‘business fees’. One of these payments was for a whopping 189.84, without any advance notification or invoice. How do I make it ‘impossible’ for them to help themselves?
                                        Can anyone suggest how to proceed (switch) without disrupting the flow of business?
                                        Thanking you in advance for your advise!


                                          I ordered the mobile reader, but i turns out the terminal comes with it ???? Why would I want that when I’m looking to go wireless? Buyer beware! Thanks for the BBB tip. Will try that.


                                            We were told that our lease would be 24 months, my boss signed the contract after being told it’s only for two years. Being the shop/business just started, two years sounded a long period but she signed it believing it was the two years as promised. We have now found that she is paying the highest percentage per transaction possible and the highest rent for the unit! But that’s not all, in the very bottom corner of the contract is a box stating 48 months!!! Is this contact fraud? How would she get out of this? Telling her one thing and printing another is that fraud?



                                              ANY ADVICE ON HOW TO BREAK A 48 MONTH LEASE 36 MONTHS INTO IT

                                                Tom DeSimone

                                                Hi Rob,

                                                Unfortunately terminal leases are among the hardest agreements to get out of. If you are not using the terminal at all and have no plans to, I would recommend sending it back and paying off the remainder of your contract well before the lease expires. You will have to pay off the contract one way or another, either month by month or all at once. If you wait until the agreement expires to send the machine back, you could end up getting hit with additional fines and penalties. Leasing companies generally pay for return shipping, and will send you a prepaid box to send the machine back in.

                                                Other than that, I don’t have much advice for you. Wish there was an easy fix, but these leases are brutal. If you haven’t already, try contacting the BBB. In some cases leasing companies are willing to settle for a lesser amount if you bring the BBB into it.

                                                Good luck,


                                                  Thank you very much for this article and your website, in general. Very informative.

                                                    Antonia Nelson

                                                    In our business, the woman who set up our
                                                    Merchant account never told us about having
                                                    a four year contract! Our previous company had no
                                                    contract so we thought it was the same,
                                                    Wells Fargo has been horrible to deal with and I don’t
                                                    know how to get out of this, pulling hair


                                                      I think the worst thing about leasing is being locked into a 48 month contract for a piece of electronics that is going to be thrown around and looks old and worn out with 12 months. Worst is the fact that as PCI standards evolve yearly and as improvements to security levels emerge you(via Lower rates) or your customers can’t benefit till the lease is over where your can finally upgrade.

                                                      Avoid leasing It’s just smart business

                                                        kerstin Barber

                                                        MY EX WIFE HAD AN agreement with a credit card co. They did not personally handle the machine and left it to another company who did not fufil the tech help that she needed . She lost thousands of dollars because of their neglect . We must have had it fail at least a dozen times during the first two months of leasing. It failed many times later. We had them take the machine back and they never called us. We were under a contractual legal obligation to be tied to a three year contract , but we feel that after all our trying to get the machine back they ( the company they chose to service us) failed .

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