What type of credit card should you use?

A small business credit card is best for business financing.  A business credit card is especially designed as a business tool so it comes with features and services that can you can use to your advantage as a business owner.

For instance, a business credit card can help you build business credit.  From the day you launch your business, you should establish and continue to build business credit history.  Issuers of business credit cards report to business credit trackers like Dun & Bradstreet so you can be sure that as your credit activities will be recorded.  As you use this credit card for business expenses, you are also strengthening your business credit standing.

Another significant service that you can only enjoy from a business credit card is the provision of annual or quarterly account summary reports.  A business owner can actually use this summary as a reference when conducting yearly inventory or in preparing business tax files.  Thus, it will be easy to determine where the budget was spent and which of your expenses are eligible for tax deductions and tax credit.

How should you use your business credit card?

Credit cards for business are designed for short-term business financing.  However, these plastic business cards are not meant to replace the traditional methods of business financing such as a bank loan or a business loan.  Acquiring a business loan is still recommended for long-term business goals.

Where can you use your business credit card?  For instance, a start-up business owner may use it to purchase equipment which might be difficult to pay upfront.  By using a business credit card, payments can be made in small monthly instalments, instead of cash. A business credit card may also come in handy when you need to purchase additional stocks or supplies, yet funds are insufficient.  Whenever a business credit card is used, the owner must make sure that payments will be made on time.

Nevertheless, business credit cards should not be the only resource of financing a business.  If you charge all your expenses to your business credit card, keeping with payments can be a burden.  Remember that failing to pay your debts on time can result to bad debt due to interest rate charges and late fees.

Should you apply for a credit card for business?

If you own a business, then a business credit card is definitely recommended.  A business credit card will provide you the financial cushion for times when cash flow becomes tight.  Needless to say, owning a business credit card is not a pass for overspending.

On the contrary, a business credit cardholder must only use the account exclusively for important business purchases.  When managed correctly, business credit cards serve as flexible credit lines that help you build solid credit history.

About the Author

Pamela Williams is a Loan Consultant, Internet Marketer and Writer. For years she had helped consumers and business owners especially regarding business credit cards. This resource is dedicated particularly on business credit card reviews, articles, tips and advice, and online application so that consumers and business owners may compare which is the best business credit card for their business. Copyright 2011

Your Personal Liability

Issuers of business credit cards often require the owner of the account to provide personal guarantee for future debts.  This simply means you are personally accountable to pay all charges incurred using your business credit card, regardless of how your business turns out.

Let’s say for instance that your business does not go as well as expected and you are forced to shut down or switch to a different type of business, you will still be responsible for the repayment of your business credit card debt.

You should read this particular condition in the Agreement page of your business credit card.  This is referred to as the “personal liability clause”.  Carefully read and understand the exact statements that apply to your responsibility as a business credit cardholder.

How Many Credit Cards for Business Should You Get?

Some business owners may apply for multiple business credit cards for the reason that they need more credit lines.  However, managing too many accounts can prove to be difficult, especially if you incur charges on all accounts at one time.  Therefore, you should carefully consider your financial capability.

Will you be able to handle multiple business credit cards without getting into trouble?  Needless to say, the risk of bad debt increases as you try to acquire more credit lines.  If you are a new or start-up business owner, perhaps it will be better to start with just one or two credit cards for business. Find a business credit card that best complements your spending needs.

Check the Credit Limit

If you have yet to build business credit history, you might be provided with a lower limit.  See to it that you do not exceed nor maximize your credit line as doing so can hurt your business credit rating.  Charge only the most important business purchases to your business credit card.  Pay off your charges in full as soon as you can.

After proving your capability to manage debt and credit effectively, that’s the time you can request your business credit card issuer to raise your present credit limit.

Check the Interest Rate

Of course, you want to get a credit card for business with a reasonable rate of interest.  Although it is your goal to pay off your full balance each month, a low rate card will enable you to save money on times when you can only pay the minimum amount due and have to carry a balance.

You need to understand that a business credit card may carry more than just one type of APR. The interest rate that applies to your purchases may not be the same from the rate that applies to balances you transfer or if you take out cash advances.  You need to be aware of how your APR is calculated and which rate applies to what transaction.

Pamela Williams is a Loan Consultant, Internet Marketer and Writer. For years she had helped consumers and business owners especially regarding business credit cards. This resource is dedicated particularly on business credit card reviews, articles, tips and advice, and online application so that consumers and business owners may compare which is the best business credit card for their business. Copyright 2011

One great tool that can help you out is a business credit card. Acquiring a credit card for business is technically easy and quick. However, you need to spend some time deciding which credit card is best for your own business. Since the demands of businesses vary depending on its nature and size, you will have to find a business credit card that offers features and services that matches with that of your business.

Listed below are pointers on how you can select the right business credit card:

1. Check with the bank where you have an existing business checking account. It’s a good idea to check out business credit cards that your local bank offers. Since you already have a relationship with this banking institution, it will be easier to get approved for the best deal. You can even try to negotiate for a lower credit card rate or a higher credit limit.

2. Check out other options. You should also explore business credit cards from other resources. This way, you can compare the interest rates, fees, features and services of one business credit card to another. Although you may end up later on with a business credit card from your own bank, doing comparison is the only way you can know for sure that you’ve found the right credit card for your business.

3. Know your purpose for acquiring a business credit card. How do you plan to use your business credit card? What kind of purchases do you plan to use it for? Knowing the answer to this important feature should affect your choice of a business credit card.

Let’s say for instance that you plan to use it for purchasing stocks or supplies on a monthly basis. In this case, perhaps you may consider looking for a business credit card that offers cash back rewards. Cash back business credit cards are usually affiliated with business-to-business suppliers so you can enjoy discounts from your purchases while earning bonus points at the same time.

Do you intent to use your business credit card for large expenses? Do you see yourself carrying a balance from time to time? If yes, then skip the reward credit card because the interest rates are bound to be higher. Instead, go for a business credit card with the lowest possible rate and a high credit limit so you can cut back additional costs from your credit charges.

4. Check the interest rate. The rate of interest is a huge factor especially if you’re going to charge big expenses on your business credit card. Take note that some business credit cards carry more than one APR. The rate applicable on purchases could be different from the APR applied to balance transfers and cash advances. Understand how the APR is calculated. Last but not least, always try to ask for a lower rate than the initial offer.

1. Consider your personal bank. Inquire from your local bank where you have an existing account if they offer credit cards for business. As an existing customer, it would be much easier for you to get approved and ask for a better rate if you have established relationship with your banker.

2. Explore the market. After checking out your personal bank, check out other banks and issuers as well so you can compare all your possible options. Today, business credit cards vary and you should choose the one that matches the needs of your own business.

3. Know your purpose. What types of purchases do you plan to charge to your business credit card? Do you plan to use it on a monthly basis or only for emergency? If you know what you need from a business credit card, deciding which one is best for your business would be much easier.

4. How is the APR? Some business credit cards have a fixed APR while others have a variable APR. When choosing a credit card, it’s important to understand how the interest rate is calculated and what exact rate applies to a specific transaction (purchases, balance transfer, cash advance) since some credit cards carry more than one APR.

5. How about the credit limit? Will you use your business credit card for larger purchases? If yes, then you might need an account with a higher credit limit. If you own a start-up business, you may have to start with a low credit line and build up as you prove your creditworthiness to your business credit card issuer.

6. Personal Liability. Generally, credit card companies require the business credit cardholder to take personal liability over the debts that will be incurred using the account. The personal liability clause should be found in the credit card agreement so take the extra time read and understand the complete Terms and Conditions of your chosen issuer.

In the past years, business owners use their personal credit cards to fund their companies. Today, credit card issuers have introduced small business credit cards, which are especially designed to match the demands of small businesses.

One of the most valuable features of a business credit card is credit reporting provision. Payments and activities are directly reported to the business credit trackers so that business credit history can be established. This is undoubtedly beneficial not only for big businesses but for small businesses as well.

Another great advantage of using a business credit card is that expenses made for business are automatically recorded in a separate account. This makes way for easier inventory and accounting. Aside from the account statements sent each month, quarterly or yearly account summaries are also provided. These documents show a complete and detailed report of all transactions made within the previous quarter or previous year.

There are also credit cards for business that offer reward programs. These special types of credit cards for business offer its holders the opportunity to save from their expenses, earn incentives and enjoy exclusive privileges. Indeed, if you are thinking about acquiring a business credit card, a reward business credit card is definitely worth considering.

The most popular type of reward credit card is the cash back credit card. For consumers and business owners alike, the cash back rewards credit card is still most preferred because of the simplicity and flexibility of the program.

Nevertheless, some business owners may worry about the higher interest rates on business credit cards with rewards. But the interest rate can well be avoided by paying off your full balance each month. This way, you get to use a business credit card, build business credit history and earn rewards without paying more on interest rate or penalty charges. Yes, benefiting from a reward business credit card ultimately depends on responsible management of the account.

The rise in the number of business credit card users may have been brought about by the recent slump in the economy. In the past years, many business owners only use business loans to fund their expenses. Today however, acquiring an additional credit line is necessary to support the needs of a business, especially during times of crisis.

Many banks and commercial lenders have also tightened their qualifications in reviewing business loan applicants, particularly of small business loans. Recently, acquiring a business loan has become an even more difficult process than before. If you are a start-up business with no business credit history, acquiring a business loan can prove to be really tough.

Meanwhile, applying for a business credit card is technically easier. In fact, many start-up business owners have been able to begin their operations early with the help of business credit cards. They have been able to purchase the necessary equipment or buy supplies even while waiting for their business loan to get approved.

Credit cards for business are equipped with features that complement the needs of a business- be it a start-up, new, or an established business. For instance, business credit cards offer a much higher range of credit line than personal credit cards.

Users of business credit cards are also provided with monthly and yearly account reports so that expenses can be monitored effectively. There is also the option to give out supplementary cards to selected employee which makes the distribution of funds easier.

Another valuable service that can only be enjoyed by business credit cardholders is the credit reporting provision. Keep in mind that in order to build business credit history, regular payments need to be reported to the business credit trackers. Hence, it’s also important to make sure that your chosen business credit card will report your payments to the business credit bureaus.

Indeed, a business credit card may just be the perfect tool you need in financing your own small business. The advantages of owning a business credit card are definitely worth considering. If you have decided to acquire one, see to it that you will be able to manage your account responsibly to enjoy the most benefit and avoid the risks.

Why Get A Secured Business Credit Card?

Many issuers of business credit cards require good or excellent credit rating. If you have bad credit or a low score, you might not be able to qualify for a standard business credit card. But that doesn’t mean you can never acquire a credit card for business.

A secured business credit card is a good option not only to have access to a credit line but also to rebuild bad credit. In fact, this type of credit card for small business is especially designed for those with bad credit or no credit history.

The important thing is to make sure that the issuer will report your payments to a major business credit tracker like D&B. Once approved, you can begin building a solid business credit through regular use of your business credit cards and prompt submission of payments.

Secured Business Credit Cards and Interest Rates

Do secured business credit cards carry very high rates? Understandably, a secured credit card may have a slightly higher APR than a non-secured card. However, if you do your search, you should be able to find a small business credit card with a reasonable rate.

The best way to save money is to pay off your balances during the grace period. Some credit cards allow 21 days up to 30 days of grace period. Take advantage of this time to pay your bills without paying the additional interest rate.

Secured Business Credit Card Fees

What about the fees? A secured credit card will usually require an annual fee to keep the account active. Needless to say, you’ll want to look for a card that carries a reasonable yearly fee. Other fees may include late penalty charge, over the limit charge, and other finance charges.

Spending on additional costs can be avoided by getting to know the rules of your credit card and avoiding the penalties. More importantly, it minimizes the risk of bad credit so you can build up a solid business credit history.

In this article, we tackle three important questions and the answers to help you decide which business credit card suits your company.

1. How do you plan to you use your business credit card?
The answer to this question may depend upon a number of factors such as how old your business is, the type of business you run, and the financial status of your company. For instance, if you are managing an established business, you may need a business credit card to provide financial back-up when unexpected expenses arise or to build up your business credit.

If you own a new or start-up business, you may plan to use your business credit card to purchase equipment or supplies. You may also use a business credit card to establish credit history for your company.

As the business owner, it’s important for you to be clear about your primary purpose for acquiring a business credit card. This way, you can select the business credit card that offers the exact features and functions that you need.

2. How much will it cost to maintain a business credit card?
Of course, it’s important to choose a small business credit card with reasonable rates and fees. Some credit cards offer an introductory rate which could be lower than what other credit cards have. You might even find business credit cards with zero percent introductory APR.

Indeed, these business credit cards are worth checking out but before signing up the deal, check out how long the introductory rate will last and how much the regular APR would be when the promo period ends.

Aside from the rate of interest, you should also be aware of the exact fees or finance charges. Does the business credit card carry an annual fee? If yes, how much? How much will it cost you if you were late in submitting your payments or if you exceed your credit limit?

3. What are your privileges and limitations?
When comparing business credit cards, you want to make sure that you are clear about the Terms and Conditions. Take the time to read the fine print even though the size of the print and the length of the document seem discouraging. Get to know the privileges you can enjoy as a cardholder. More importantly, understand the restrictions that your business credit card issuer imposes.

Compared to bank loans or traditional lines of credit, it is generally easier to apply for a business credit card. In fact, a small business owner can simply fill out an application online, get an approval within minutes and receive the business credit card via post mail within 4 to 5 banking days.

But you may ask, why should I be interested to get a business credit card? What are the advantages of paying with a business credit card?

Higher credit limit. Unlike personal credit cards, business credit cards start with a higher credit limit. This is to give businesses sufficient line of credit to cover for their expenses. Typically, a credit card for business will allow up to $50,000 credit. Of course, this could increase depending on the credit history and performance of the account holder.

Build business credit. As you use a business credit card to pay bills or make purchases, you are also building up your business credit history. In fact, these cards are the perfect tools for a start up business to establish business credit.

Separate finances. Using a business credit card is a great way to separate business and personal finances. Thus, keeping track of business spending becomes more convenient and preparing business tax files less complicated.
Enjoy rewards and perks. Many business credit cards offer varying rewards programs ranging from travel rewards to gas rewards to cash back. Aside from the opportunity to get rewarded, these special business credit cards also offer perks and free services exclusively for the reward cardholder.

Enhance business reputation. Many vendors and suppliers today prefer to accept credit card payments. In addition, issuers usually allow the option to print the company’s name and logo on the credit card which can truly enhance a company’s image.

Pamela Williams is a Loan Consultant, Internet Marketer and Writer. For years she had helped consumers and business owners especially regarding business credit cards. This resource is dedicated particularly on business credit card reviews, articles, tips and advice, and online application so that consumers and business owners may compare which is the best business credit card for their business. Copyright 2010

]]> http://www.businesscreditcardsite.com/blog/why-pay-with-a-business-credit-card/feed/ 0 http://www.businesscreditcardsite.com/blog/finding-the-best-credit-card-for-your-small-business/ http://www.businesscreditcardsite.com/blog/finding-the-best-credit-card-for-your-small-business/#comments Mon, 20 Dec 2010 08:39:25 +0000 financegirls http://www.businesscreditcardsite.com/blog/?p=3196 With so many choices of credit cards for business in the market, making the right choice can be tough. Would you go with the business credit card that offers a zero introductory rate or would you pick a business credit card with rewards?

What essential features and functions should you look for from a small business credit card? Below is a list that should guide you with your search:

Business credit reporting. The ideal small business credit card should not only provide financial support but also help you in building business credit history. Not all business credit card issuers offer this provision so be sure that your chosen credit card does.

Minimal Fees. A business credit card with a reasonable rate and no annual fee can save you a great deal in maintaining your account. What about the penalty charges? How much will it cost you if you fail to submit your payment on time or if you exceeded your credit line? It’s a good idea to look for a business credit card with as few fees as possible.

Low interest rate. If you plan to carry over a balance in your account, go with a business credit card that offers a low rate. Skip reward credit cards as they usually have higher interest rates than non-rewards credit cards for business. If you want to get a business credit card with zero introductory rate, take note of the length of the introductory period and make sure that the regular APR would be reasonable as well.

Expense tracking options. The option to access your account online is an indispensable feature because it will give you the chance to check your spending conveniently at any time. Aside from the monthly credit card statements, will you be provided with a quarterly or annual summary report as well? The summary report is a great reference in reviewing your overall spending for the previous quarter or year and in preparing your business taxes.

Employee credit cards. Most credit cards for business will give you the option to distribute supplementary or employee credit cards. Distributing employee cards is a great way to avoid delays in the business operations because the release of the budget is still under process. Since all transactions will be reflected in the primary holder’s account, the business owner can still keep track of employee spending.

Reward opportunities. IF you can pay your monthly balances in full, a business credit card with rewards is a great way to earn bonuses and enjoy savings from your business expenses. Find a business credit card reward program that matches the needs of your business.

Pamela Williams is a Loan Consultant, Internet Marketer and Writer. For years she had helped consumers and business owners especially regarding business credit cards. This resource is dedicated particularly on business credit card reviews, articles, tips and advice, and online application so that consumers and business owners may compare which is the best business credit card for their business. Copyright 2010

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