Bad credit card debt has reached its peak in almost 7 years. Currently, auto and home loans are staying behind credit card losses at a rate that haven’t been observed in at least 10 years. What about your business? Do you need a bad credit merchant account? Where can you find it easily? No worries! The answers are below.
Bad Credit Card Debt & Bad Credit Merchant Account
Richard Fairbank, Capital One Financial Corp’s chief executive officer, thinks the quality of credit for certain customers have witnessed some “degradation.” According to Bloomberg Intelligence, the charge-off rate jumped to 3.82% in the 1st 3 months of 2019, thus representing the highest point since Q2 of 2012.
The robust U.S. economy and high employment rates speak of the fact that the majority of consumers aren’t late for debt payments. New foreclosures and bankruptcies dropped to the lowest point in at least 15 years in 2018.
The 4 biggest U.S. banks generated about $4 billion in charge-offs from credit cards in the past Q, and $656 million from the rest consumer lending. This represents the biggest gap since at least 2009. Now, card charge-offs account for over 80% of the overall consumer credit costs. 3 years ago, this number was 67%.
Given all the developments in the field, what are you planning for your high risk business? One thing is for sure: you need to work with a reputable processor that can get you a bad credit merchant account without challenges. Make sure the credit card processing company you choose offers the most advanced services, the highest level of security, as well as the cheapest rates in the industry.
Bad Credit Debt Growing
As it was mentioned above, credit quality has experienced some sort of deterioration recently. So, what’s the reason? Well, part of it stems from growth. This means lenders have crowded into credit cards in recent years while moving back from auto and student loans.
The 2 major players in the U.S. mortgage space, Bank of America and JPMorgan, report that the delinquent debt has recovered. Currently, banks are found to be more selective. Card account shares are going to those with super-prime credit scores (featuring almost a 3-year high), as the American Bankers Association reports.
6 out of 10 Americans (aged 45 to 59) having participated in a recent survey have an insufficient emergency fund. This number has grown 35% since 2018.
The 2019 Financial Literacy Survey from Equifax reveals that approximately half of American adults have insufficient funds in savings that would allow them to cover 3 months of living expenses. This is, in fact, a standard sum for emergency funds.
Did you know that the Blue Cash Preferred card’s cashback rewards program by AmEx is going to offer 2 new categories? In addition, tourists who’re using MasterCard and Visa in the E.U. are going to pay lower fees.
With all this in mind, keep your finger on the pulse and work only with a respectable payment processor to be able to move forward successfully.
Author Bio: Electronic payments expert Blair Thomas is the co-founder of high risk payment processing company eMerchantBroker that offers the most secure and cheapest bad credit merchant account in the industry. He’s just as passionate about his business as he is with traveling and spending time with his dog Cooper.