Business Fees vs Personal Fees?

[JuliaRemy]

I have been told that if I switch from a personal account to a business account, the fees I incur when receiving payment will be much smaller.  Is there any truth to this?

I am a freelance artist, and I take payment through PayPal for any custom artwork I am commissioned to do.  In an article I read, freelance artists and crafters were urged to switch to business accounts in order to lkeep more of what they earn, and lose less to fees.  

Can anyone clue me in on this?  Thank you so much!

[angelleye]

I can save you some money, yes.

If you're receiving payments for orders of products/service quite a bit then you'll most likely end up with quite a few of those payments being made with a credit card as the funding source for the payment.

With a personal account, you only get a few of these per month at the regular rate.  Then if you end up getting more payments like this after that the fee gets jacked up on you.

So it's good to get switched to a business account because of that, but also simply because if you're conducting business you should have a business account, which is what the jacked up fees sort of force people to do.

[JuliaRemy]

Good to know! Do you know what the fees get raised to after the few transactions at the normal rate? I plan on switching to a business account now, but I'm curious since I can't seem to find this info on PayPal anywhere. One other question: I am a freelance artist, so I do not have an actual "business". When switching to a business account, what would be appropriate to write in where it asks for your business name? Thanks so much!

[angelleye]

I'm not a tax specialist or a business lawyer, but I would recommend in the very least that you get a DBA (doing business as) setup for your state.  Then that's what you would use as the company name.

You could simply use your own name, but that's not typically advised. 

[angelleye]

I think I've seen that the rates jump to 4%+ when processing credit card funded payments in a personal account (after reaching the limit).