U.S. credit card debt hit $764 billion in the first quarter of 2017, according to the statistics released from the Center for Microeconomic Data for the Federal Reserve Bank of New York. Those these numbers are high they are better than the $870 billion in credit debt that Americans hit during the Great Recession.
The financial downturn of the previous decade not only left many individuals and businesses swimming in debt with plummeting credit scores, credit repair businesses got a bad name in the industry. As individuals found it increasingly more difficult to secure a loan, rent an apartment, or buy a car, the credit repair industry progressed. Though many legitimate businesses stood up to help those trying to get their credit back on track, other scam artists preyed on the vulnerable. The rampant fraud in the industry led to banks classifying credit repair businesses has high risk. Carrying that label means a business has a more difficult time getting approved for a credit repair merchant account, which is required for any business that wants to accept and process credit cards. Credit card processing is necessary for any online or any business that wants to be more profitable and marketable.
Though credit repair businesses have an uphill battle, obtaining a merchant account is not impossible. If you know the process and what to expect, you can get an account and begin efficiently and safely accepting and processing credit card payments.
Factors that Impact Getting an Account
Many credit repair businesses and other high-risk businesses get turned down for a merchant account or are subjected to higher fees and stricter restrictions simply due to the nature of their businesses. Traditional financial institutions turn down many high-risk businesses because of their increased chances of excessive chargebacks, which are when a consumer disputes a charge and the merchant refunds it. Merchants also end up paying a fee for a chargeback. Too many chargebacks in a single month can result in lender terminating a merchant account.
In addition to chargebacks, merchants get turned down if they have poor or inconclusive sales projections and bad credit. A previously terminated merchant account also can negatively impact a business’ chances of obtaining a credit repair merchant account.
Find the Right Provider
When it’s time to find a merchant account provider, look for one that is willing to ignore the stigma surrounding the industry. It is key that you find a provider that will make a decision based on your business’ individual merits. Also, make sure the provider you choose has a history working with businesses in the credit restoration or repair industry. If they have worked with these businesses in the past, they will know the challenges to expect and can help you plan for them.
Some may think it is smart to be vague or call your business something it’s not in order to just get a merchant account open. By calling your business, “consulting” or “business services” you may end up getting approved for a credit repair business, but then, you can expect some trouble later. When you lie about transaction volumes or the services you provide, your provider can shut down your account and hold any funds that are in your account.
If you tell the truth and give a provider an accurate picture of what you do and the business you expect to bring in, a merchant account service agent can be upfront about costs and other factors. Taking this approach paves the way for you successfully accepting credit card payments in the future.
As consumers continue to choose paying for transactions with credit cards over cash, there is a good chance that they will continue to carry a significant amount of debt. Carrying too much debt creates a need for top-notch credit repair businesses. Responsible, valid businesses that want to help people dispute incorrect information on their credit reports and help them boost their credit scores must people able to accept credit cards for payments for their services.
When it’s time to obtain a credit repair merchant account, turn to a merchant account service provider that has experience and expertise to provide you with services that match your needs. Applying for a merchant account is simple and fast.
To learn more about applying for a credit repair merchant account, contact eMerchantBroker.com (EMB). We are a trusted, reliable payment solutions provider that specializes in offering merchant accounts to all type of merchants, including high-risk businesses.