November 18, 2023

If you run a construction company, you probably get some of your building materials and equipment most importantly retailers specialized in home improvements and development tools. So naturally, you’ve pointed out that they give store business charge cards to be used in their stores, with great cash back rewards.

And now, you’re wondering whether it is the best option for your construction company.

Luckily, you are in the right place. After reading this article, you’ll be on your way to learning which ones are the best credit cards for your construction company’s financial situation and needs.

best credit card for construction business for Your Construction Company
If you still feel that a store credit card is the right choice for your construction company, below, you’ll find detailed information about each one of the best business charge cards where the card issuers are stores, or they work in tandem with a lender, like American Express.

Here, you’ll definitely find the best credit card for small construction business.

Find a processing company that doesn’t lock you into a contract or charge excessive fees.
Selecting a credit card processing company presents a unique pair of challenges when you own a construction business. Because of construction’s project-based nature, payments are often large and intermittent. Plus, you may want to accept card payments in numerous ways to make it convenient for clients to pay you. For example, in addition to accepting credit card payments over the telephone and in person, you really should accept card payments online via invoices and in the field utilizing a mobile POS system linked to your phone.

While much of the information here can apply to any business, we’ll look at special considerations for construction businesses whenever choosing a credit card processor, including what to look for in contracts, rates and fees.

Here are seven tips for choosing a credit card processor for your construction business.

1. Get a merchant account.
There are two main payment processor types. Most processors are ISO/MSPs that you can create with your merchant account. This type of processor is best for companies that process more than $3,000 per month and those with varying transaction amounts, so it’s likely the best fit for your construction business.

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The other type of processor is a merchant aggregator or payment facilitator. These businesses sponsor multiple businesses under their master merchant accounts. Businesses that process significantly less than $3,000 every month may save money by working with this type of processor since it usually charges a set rate with no monthly or annual fees. However, aggregators tend to be more risk-averse than ISO/MSPs, and irregular transaction amounts can trigger a fraud alert that triggers the processor to freeze your account.

2. Be upfront about your transaction amounts and volume.
When you’re calling for a cost quote, the visa or mastercard processing service’s merchant will ask you what your average ticket (invoice) size is and the dollar amount you process – or anticipate processing – every month.

It’s important to be as accurate as is feasible with these numbers so the rep can provide you with accurate pricing. And, if you decide to proceed with the business, this information will help the rep create your account correctly. If you have an irregularly large transaction approaching, or if your business is busier than average and you simply anticipate processing a bigger volume of transactions, you can call the processor in advance to get approval.

3. Choose a company that offers month-to-month service.
When it comes to a contract, you’re seeking the same quality other smaller businesses look for in a payment processor: no lengthy terms. This is important because if the processor’s services wrap up not being truly a good fit for your business, you can close your account without penalty.

Processing contracts typically have three-year conditions and charge expensive early termination fees if you cancel the service before the term expires. It’s important to learn the contract to verify the term length, cancellation procedure and applicable fees before signing with an organization.

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When you request the contract to examine, the sales rep may send the application only; however, this is merely one area of the contract, so you may need to specifically request the conditions of service and program guide. The program guide is typically where the information about the cancellation policy resides.

4. Request interchange-plus pricing.
Industry experts recommend the interchange-plus pricing model. However, lots of the sales reps you call will quote you the starting rate for tiered pricing – also known as the “qualified rate” that only applies to regular cards you accept in person – which means you might have to specifically request an interchange-plus rate.

Some sales reps may discourage you from choosing an interchange-plus plan because the business makes less money with it than with a tiered pricing plan. Others may have specific prerequisites before you qualify for their interchange-plus plans. For example, they might require you to process a certain transaction volume each month or be a customer for a certain amount of time. However, the best credit card processors offer interchange-plus pricing to all or any their customers without these restrictions.

Another reason to opt for interchange-plus pricing is the fact it offers you a level ground for comparing quotes. This pricing model is dependant on interchange – a table of rates set by the card networks – and everyone pays the same amounts. The processors put in a markup to these rates, and that’s the speed you’re quoted, so you can simply see which companies provide you the cheapest rate.

Tiered pricing is difficult to compare because processors add markups to the interchange rates and then sort them into tiers. The quantity of tiers and the types of cards and transactions sorted into each one vary by processor. However, many have three tiers for credit and debit cards: qualified, mid-qualified and nonqualified.

5. Find out about fees.
Credit card processing fees include monthly statement and gateway fees, plus an gross annual PCI compliance fee. Processors will also charge a monthly minimum. Additionally, there are standard incidental fees (batch, voice authorization, AVS, chargeback, retrieval and NSF fees) and network fees (APF, FANF, NABU and data usage).

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When you call for a price quote, request a cost schedule. Once you’ve narrowed down the firms you’re considering to your top three or four choices, ask them to send you a complete contract to review – including the application form, conditions of service and program guide.

Read the entire contract, highlight or list all the fees it mentions, and compare it to the payment schedule. If fees weren’t disclosed or sound odd, ask the merchant about them and decide if they’re willing to waive them. If they are waived, make certain you receive a waiver or an amended long term contract.
6. Look for a processor that offers level 2 or 3 processing.
When you accept a credit card from a consumer, it’s processed as an even 1 transaction, which requires minimal information to process. However, if your clients tend to be other businesses, plus they pay you using corporate cards, you’ll pay higher processing rates if you provide the processor with additional data about the purchases.

For level 2 processing, you’d need to provide your customer’s billing address, customer code (or purchase order number) and tax amount. For level 3 processing, you’d also have to include an invoice number and a description.

7. Use a processor that accepts high-risk businesses.
From a payment processor’s perspective, construction is a higher risk due to high invoice amounts, irregular payment spacing, variety of industry regulations and the actual fact that customers will make card-not-present transactions.

Credit card processing in high-risk industries isn’t attractive to many payment processors. Seek out payment companies with experience doing contractor mastercard processing, as these companies will be more unlikely to freeze your account when they see seemingly randomly spaced large sales.