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5 Reasons Why You Need High-Risk Credit Card Solutions

Business owners know that every cent they invest counts. When it comes to making the most of your business purchases, using a credit card can be a lucrative technique.

 

Business credit cards may provide many benefits. These include discounts or cashback, loyalty points, travel insurance, and expense management. But testing every card out there to decide which one is better suited to a company can be a time-consuming process—and extra time is something most business owners don’t have.

Credit Cards For SMB

The best small business credit cards offer a lot to the game – most notably, extra rewards. But it’s important to note that even the top cards still have some flaws. 

 

Even the best small business credit card is not the best credit card for a business to use when you need a long interest-free term. The optimal solution is to use a company reward card for day-to-day spending and a 0 percent APR consumer card for transactions that will take months to repay.

 

Credit card processors can perceive specific industries or companies as riskier compared to others. For this reason, some of these processors may reject requests for high risk merchant accounts. The following are the five main reasons you might have to get a high-risk credit card solution for your small business.

Reason 1: You Don’t Have Reputable Personal Credit

When your firm is a start-up or relatively small, your credit record has a huge impact. Majority of the credit card processors always check your credit card history. They can reject your application if they find that your credit score isn’t good enough. Irrespective of how well your company is doing, if your credit score doesn’t match their criteria, they can decline your request.

 

Therefore, over time, you should put more effort into building your credit scores. Here, you might still have to find a credit card processor for you to realize this objective. In such a situation, the best alternative is to go for a high-risk merchant account.

Reason 2: You Or Your Company Have Current Tax Liens

Irrespective of how great your credit scores look, most credit processors would still be cautious of any company or personal tax liens. Most of these financial institutions understand that the authorities are always serious about tax collection. Therefore, the financial institutions wouldn’t give you credit only to run out of cash to pay back the credit plus its interest. As such, before you can address personal and your company’s tax liens, you’ll have to go for a high-risk credit card solution.

Reason 3: If You are Running An Inappropriate Type of Business

Running a wrong business type from the merchant account processor’s perspective can lead to more rejections than other reasons. The different credit processors perceive various kinds of businesses as riskier compared to others. Some of the types of companies that most credit processors reject include:

 

Subscription service businesses: Today, subscription service providers are popular. A perfect example is the Blue Apron subscription service that’s responsible for the delivery of cooking ingredients. However, most credit processors associate such businesses with a high risk of chargebacks. Therefore, a good number of them would reject your request if your business is a subscription service provider.

 

Grown-up entertainment companies: Even if most adult entertainment businesses make good profits, a few credit processors avoid associating with them. Therefore, you might have to find a high-risk credit card solution for such a company.

Reason 4: If Your Application Doesn’t Meet the Processor’s Criteria

At times, the responses you provide through your application might not meet the credit processor’s criteria. For instance, some processors limit the duration you must have been in operation before your application succeeds. Also, your company’s projected processing volume may not match the industry’s averages, and for that reason, the credit card issuer might decline your application.

 

Most credit card processing experts often advise you to provide your best projection, and you can optimistically give your estimates. And if your responses are depicting your current figures and any projected growth, you can justify your answer. However, a few of the credit card processors might still reject your application.

Reason 5: If the “Match” Listing Consists of Your Business Name

Unfortunately, if your merchant account got canceled in the past, you might not succeed with your application with most card processors. Your preceding merchant processor might have included your business name in a TMF Match List in some situations. As such, you should make an effort to find out if you still have pending bills with your previous card processor. In case you pay them off, TMF might remove your business name from the Match List.

 

Additionally, your business name might get into the TMF Match List through other ways. For instance, when clients reach out to the credit card processing firm, they cannot contact your company. Therefore, you should urgently address any client issues to prevent such situations from happening.

 

In case your company gets rejected by several average credit card processors, there’s a likelihood of getting a relatively affordable high-risk payment solution. However, because you or your company would be considered risky for some reason, you’ll have to be charged relatively high fees.

 

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