If you are a new business, or new at willingness to accept credit card payments from customers, you can expect yourself to land in trouble with financial institutions for credit cards and charging sales against them. Many small and medium sized businesses have had a long tussle over this issue, and generally takes a lot of time and effort to get these organisations to approve credit card payments.

Even if it is difficult to get a bank to process your credit card sales, you shouldn’t leap for the first one to say the golden word. In fact, regardless of how long it takes, you should investigate and search one offer that is an acceptable one. Remember, like any short-term lender, you could end up paying sufficient fee for the recovery of your sales. And as always, there are a number of other things you should also look out for in addition to the cost advantage.

Financial institutions charge discount rates on each sale processed through a charge card, which takes into consideration the overall age of the business, the credit rating of your business and yourself, the average value of each transaction occurring through charge cards used by customers.

A bank’s transaction discount rate varies depending on the current market rate, and above if your business nature is risky or small as per bank regulations. If you have been offered a high rate, do take your time to search for other potential institutions which may be willing to offer a lower rate; remembering that all glitter is not gold. Not all banks or financial institutions will offer the exact services you require, but don’t compromise on the very basics – you still can get good service and support unless you deal in products and/or services that have a strict code for resale in the country. Study the minute details for each offer made, you do not want to get caught in the bushes when you should be out there walking freely in the green.

Make sure that the transactions cost stated is favourable, you don’t want to end up paying more for each credit card transaction. See that they do not necessarily require you to have an account with them to allow transaction processing at low rates or otherwise. Choose the best possible alternative to get a good service and at a reasonable price to your business.

Read all clauses of the agreement that is being drawn up. Read the fine prints – you should be allowed to protect your own rights as client of the bank and not be extorted unjustly by any financial institution, no matter what the cost. Also find out how much time does it take to clear each transaction that goes through your bank account.

Avoid making any long-term credit transaction, such as the leasing of equipment or software. Go for direct acquisition of such items in the beginning of the business. Lessees often end up paying a lot more than what they bargained for in interest and other penalties if the lease payments are not matched according to the agreement.

Some financial institutions may want to verify your business address, even if it is you place of residence that you use as your business location. They may want to take a few pictures and possibly enquire your neighbours or any customers and suppliers of your business for assurance of existence and service.

Finally, you should be ready to present your business papers to the financial institution to apply for the service or an account, if required. The documents include your business registration papers, tax returns, previous profit and loss statements (if any), personal guarantees (depending on policies), and possibly a minimum deposit in the account. They will require a two-way access to your account, which would allow deposit and withdrawal of cash, so that they can recover any amounts that may outstanding for service charges.