Why Should I accept Credit Cards?
We all know what it’s like to accumulate debt on a credit card right? Accepting credit cards is one of the keys to doing business. According to creditcards.com the following statistics pertain to the average household;
Americans have created billions of dollars worth of debt over the past 45 years, and credit card debt has been an important part of that. Credit card debt dove — along with consumer spending — during the 2008 financial crisis and slow growth has kept total revolving debt at pre-crisis levels, though it is creeping up. According to figures from the Federal Reserve, total U.S. outstanding consumer debt was $3.62 trillion as of May 2016.1 That figure includes car loans, student loans and revolving debt, but not mortgages. Total U.S. outstanding revolving debt, which is chiefly made up of credit card balances, was $953.3 billion as of May 2016.1
Average credit card debt is not a single number. Instead, you will get many different answers, depending on how you measure it. The average debt is:
- $1,128 per card that doesn’t carry a balance (the amount is charged, but paid off monthly)2
- $1,674 per account, U.S. adults with a credit report and Social Security number3
- $3,766 per person, U.S. resident adults4
- $5,232 per person, excluding unused cards and store cards12
- $5,540 per U.S. adult with a credit card5
- $7,494 per card that usually carries a balance2
- $9,600 per household with credit card debt6
With the information provided above we can see that people are willing to spend money on things they want or need and your business should provide the opportunity to do so.
Where do I start?
Googling How to accept credit cards will yield you a great deal of information, but it’s broad. According to your business type you’ll begin looking for a credit card processor that can place you with they right type of merchant account. The processor is considered the intermediary. When you swipe the customers card the processor then sends the credit card transaction through interchange and the issuing bank will release approvals or declines. When searching for your processor make sure to look at all of the details. You don’t want to get stuck paying excessive fees or locked into device contracts without your knowledge.
The Application Process
So you found yourself a processor huh? Good, lets move onto the application process. When submitting your application to the processor, you’ll be giving plenty of information about yourself including credit history, personal history, business type and financials. 9/10 if you don’t have great credit you’re going to be jumping hurdles and its you’re going to be getting shin checked jumping every single one. Lucky for you, even if you don’t have the greatest credit there is definitely places to go. Once you’ve submitted your application the processor will then send it into underwriting. Underwriting is where the company will begin to go into detail about your business and try to scrub you against several systems to verify your identity, business and compliance. Many times you’ll be asked for more information then you were prepared for so be ready!
Congratulations, you’re now ready to process credit cards! Assuming you’ve been given your machine or virtual terminal make sure you have the terms in mind. What I mean by that is if you were approved for a 10K MID and you placed $250 as the average transaction…..DONT GO OVER. If you’re a new business and you make 10K in one day that account is going to be held. There are several pieces that go into utilizing new and seasoned accounts that will be listed on my next blog.
If you have any questions regarding your newly placed merchant account or are just wondering on the process you can reach me directly at 844-887-7623. I’ll be more than happy in guiding you in the right direction. Just remember one thing…..WE BEAT ALL RATES.