Things to Consider When Looking For a Small Business Credit Card

Despite all the hype about business credit cards, not all of them give the best deals. What they tell you in the advertisements may not be the exact terms included in the credit card contract. Therefore, every business owner must be cautious when it comes to choosing a credit card for business. In this article, we will discuss the things you should consider to get the right business credit card.

A credit card that matches your company’s needs. Make sure that the business credit card is suited for the size, type and needs of your business. These are just some of the questions you should ask about a business credit card:

• Do you need a business credit card with a rewards program?
• Do you want a business credit card that enables you to distribute multiple employee credit cards for free?
• What particular feature of the business credit card can help you in managing your business?
• Do you have the option to access your account online?
• Will you be given yearly summary reports aside from the monthly billing statements?
• Does the business credit card provide you with a fraud liability protection?
• Is it a business credit card that particularly caters to small businesses
• Is it designed for medium-sized or larger business?

A business credit card with low or fair interest rate. Although your goal should be to pay off your balances in full each month, you can’t really guarantee that your submission of payments will be perfect at all times. There may be instances where you need to carry over your balance and if your credit card has high interest rate, it will definitely make a big difference. Naturally, you’ll want to go with a business credit card that has a low or reasonable APR.

Choose your rewards. If you want a business credit card with reward, what type of rewards program best matches your company? There are a couple of reward programs you can choose from such as Travel Rewards, Gas Rewards or Cash Back Rewards business credit card. Aside from these basic reward programs, what other privileges and perks does the business credit card offer?

Credit Requirements. Does the business credit card require excellent credit history? If you haven’t started building your business’s credit history, your personal credit history will be used instead. Therefore, have you checked the status of your personal credit? Is your credit score good enough to get you approved or do you need to improve it before applying for a business credit card?

If you want, you can also apply for a secured business credit card. A secured business credit card requires the submission of cash deposit in your account. The amount of your security deposit will often determine your credit limit. Although it guarantees approval, secured business credit cards usually have a higher rate of interest compared to business credit cards that require good or excellent credit. Nevertheless, they can be used for rebuilding or improving bad credit.

Building Credit for BUsiness through Business Credit Cards

Establish your business credit right away by getting a business credit card is smart choice and other way of building financial strategy for the future.

Whether you are running a big business or have just started up with your own small business, building credit for your company is probably one of your main concerns. Business credit cards

offer entrepreneurs the chance to establish a separate credit history for their business.

By establishing good business credit, a business owner is also building a strong foundation for the company. When the time for expansion comes, it will not be difficult to secure a loan approval from lenders and other business financing providers. In this article, let’s talk about how business credit cards can help you grow your business and build credit.

Enhance your credibility. Using business credit cards to make your payments builds up a more respectable image for your company. Having the name of your company printed on your business cards surely adds up to your reputation. Some business credit card issuers today offer the option to use checks through a business credit card account. That means, the entrepreneur can send checks to pay suppliers or vendors who do not accept credit card payments. This is a great feature that some business credit cards offer.

Ease of use. Business credit cards provide a convenient solution when emergency expenses arise. For example, if one of your equipment broke and has to be replaced, you do not have to stop your production just because you don’t have the cash on hand to fix or replace a broken device.

If you receive an exceptionally large order from one of your best customers, you don’t have to refuse because you lack the resources needed to produce such a large demand. A business credit card allows you to make purchases easily and pay them at a later time.

Convenient accounting and bookkeeping. Keeping financial records of the business is one of the most important steps in maintaining good credit. Your business credit card helps you keep track of all your business expenditures without having to do it manually. Most business credit cards come with a free online access where you can personally check your account, download your accounts summary and use it in your accounting.

Safer means of payment. Business credit cards are safer to carry around than cash. This is invaluable since most of the time businesses need to make large amounts of purchases and it’s not practical to carry a bulk of cash. In case the business credit card gets misplaced or lost, one can call the bank right away and freeze the account to prevent unauthorized transactions.

Incentives and rewards. Businesses can also take advantage of the incentives and rewards that business credit cards offer. Because entrepreneurs usually charge large expenses in their accounts, they can easily gather enough points to earn more rewards.

A separate business account. Even for home based business owners, having a business credit card is advised because it helps them separate their personal funds from their business finances. This is an indispensable feature especially as the business begins to expand and acquire more customers.

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Avoiding the Snares of Business Credit Cards

Business credit cards are often advertised as great tools in managing small businesses. Today, more many entrepreneurs opt to get a business credit card and are optimistic about the benefits these cards can bring for their business. Although it is true that using credit cards for business have advantages, you should also be aware of the possible dangers that await those who misuse these business tools.

In this article, we’ll talk about the snares that are associated with the incorrect use of business credit cards. Being aware of these dangers does not mean to discourage business owners from using business credit cards. On the contrary, it aims to help business owners to use their business credit cards more effectively.

Business Credit Cards- The Snares to Avoid

Overspending. Business owners are not the only ones who are warned against this snare. Even personal credit card holders can easily fall victim to this trap. Because credit cards are so easy to use, it is too tempting to use them carelessly, without considering the consequence it could bring.

If you’re a business owner, see to it that your business credit card is only used for official business expenses. Some entrepreneurs make the mistake of charging even their personal expenses to their business credit card. For instance, if you’re dining out with your family or friends, or buying some groceries, you may be tempted to charge these bills to your business credit card. But such a habit poses a great risk.

Before you’ll know it, you may have already incurred huge bills in your business account. You could have a difficult time paying off those charges in full and you may be forced to carry over your balance instead. Sooner or later, this habit can cause you serious debt problems.

Maximizing your business credit. Another risk that you must be aware of is the tendency to use your credit limit to the fullest. Experts recommend not using more than 30% to 40% of your credit limit to avoid the risk of bad debt.

However, some entrepreneurs bravely max out on their credit cards especially when starting up the business, without realizing that they have already fallen into the debt trap. It isn’t realistic to expect that the business would be profitable within the first few months. Most successful businesses needed to wait at least three months before getting profits.

During the initial stage, you may find it impossible to pay off the charges on your business credit card. And because you’ve already maxed out on your credit limit, it wouldn’t be possible to use your card for new purchases. Aside from this you’ll automatically be charged with the interest rate from month to month plus possible penalty charges for exceeding your credit limit.

Such a move can also have a negative effect on their credit history. If your credit history shows that you often use your credit limit in full, lenders could have a negative impression about your company. On the other hand, leaving at least 50% of your credit limit free makes you an ideal candidate for lenders.


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Possible Disadvantages of Contractors Business Credit Cards

Construction Business grows bigger nowadays but applying a contractors' business credit Card really a good choice? First, consider the possible drawbacks of owning this type of credit card.

Credit card companies know the potential of business credit card clients. This is why they come up with more specific and better features that are especially created to meet different types of businesses. For instance, the group small constructors and construction companies is a niche market with great potential.

To attract contractors and business construction owners, credit card companies offer specific features that are designed to meet their spending style and needs. According to recent surveys in the credit card industry, most businesses spend only less than 5% on their business credit cards. Thus, credit card issuers are currently introducing offers to entice business credit card holders to use their cards more often.

One example is the Chase Contractor Visa Business credit card. This card offers promotional financial and a attractive reward package for those who will spend at least $1,000 or more on their construction material purchases. This card also doesn’t have a pre-determined spending limit so its holders can use it for as much purchases as they need.

If you’re a contractor or is in the construction business, taking a look at business credit cards for contractors are definitely worth considering. Nevertheless, here are the possible drawbacks that you should be aware of.

Possible Drawbacks of Contractors’ Credit Cards

It’s important to remember that each business credit card has its own set of rules and conditions that you need to know. The same thing applies to business credit cards with rewards programs for contractors. If you’re not clear about the rules, you may find yourself stuck with a card that doesn’t reward you at all.

What types of purchases are eligible to earn you points? You need to be very sure about the exact type of purchases or from which merchants you should purchase from in order to earn points. Otherwise, you could be using your business credit card in the wrong way. Even if you charge your purchases to your credit card, if those purchases do not count, you won’t be earning points at all.

Is there a limit to the amount or value of reward points your can earn? Some credit cards would only allow you to earn a maximum number of points each month. The Chase Contractor Visa Business credit card has a limit of 20,000 points per month which means you can’t exceed the 20,000 points even if you made more than $20,000 worth of purchases for the whole month.

Does the card impose a pre-determined limit on spending? In case you exceed your credit limit, would this mean you’re disqualified to earn points? Or would you be allowed to earn points for the amount that falls below your credit limit? Is there a penalty fee for exceeding your credit limit?

These are important terms and conditions that you should be clear about before signing up for a contractor’s business credit card. To learn about the exact terms and conditions, you need to take the time to read the contract before filling-out and submitting your credit card application.

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Possible Drawbacks of a Business Credit Cards

When there's an advantages, surely there's disadvantages too. In this article, we'll discuss the possible disadvantages of credit card misuse and how to avoid them.

Many business owners today are encouraged to apply for a business credit card as one way to finance their business. Experts recommend the use business credit cards as a way to build a separate credit history for your company.

Business credit cards are known for providing business owners an easier way of tracking their expenses, monitoring their employees’ spending, building business credit and enhancing the company’s reputation. But apart from these benefits, there are also drawbacks to using business credit cards that you should know about. What are these disadvantages?

Your Personal Credit History Is at Stake!

It is true that applying for a business credit card is so easy and convenient. You can submit your application online and get approved instantly, especially if you have excellent credit. Nevertheless, you should be aware that when you sign up your business credit card contract, included in it is the personal liability agreement.

Since your personal credit history would be used to approve your credit card application, you are also personally held responsible for all debts that may be acquired in your business credit card account. This means in case of credit problems or if your company fails to keep up with credit card payments, you would be accountable to take over the repayments of all charges.

The personal liability clause implies that all transactions made in your business account can directly affect your personal credit history. This statement is still applicable even if you’ve already applied for a corporate credit. Usually, a business owner wait at least two years before lenders begin to recognize their corporate credit history as separate from their personal credit history. Thus, a single late payment with your business credit card account or your business loan can significantly pull down your own credit score.

With this in mind, you need to be particularly aware of how you use your business credit card and how well you keep up with your repayments. Keep in mind that how you handle your account will also reflect on your personal credit report.

Mismanagement of Your Business Credit

Having a business credit card account gives you the option to distribute extension credit cards or supplementary credit cards to your employees. However, this flexibility comes with the risk of employees abusing or misusing your account for their personal benefits.

Therefore, if you do decide to distribute supplementary cards to your staff, you should only choose a few of your most trusted employees. Add to this, make it a habit to check your monthly billing statements and pay attention to each of the purchases incurred by employees who own a supplementary card. This way, if unnecessary expenses were incurred, you can take appropriate action immediately.

Remember that having a business credit card gives you the chance to either make or break your business credit. If you handle your business credit wisely, you can be assured that you’ll be building a solid and excellent credit history for your company. On the contrary, failing to manage your business credit efficiently can lead to trouble and complications.

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Maintaining a Good Credit for your Business

Do you have a good business credit history? This article is about the basic points of a business credit and why it is important to maintain a good standing.

You may already be aware on how to keep your personal credit history in good standing. But if you’ve just started a business, do you know the steps you should do to maintain your business’s good credit? Before we answer this question, let us first talk about what business credit is and why it is important for all businesses.

What is Business Credit

Your business credit profile contains all credit information about your business. It reflects transactions between your company and your creditors, your suppliers, and other business organizations that you deal with. Business credit reporting companies like Duns & Bradstreet and Experian collect your credit information from these sources. Business credit bureaus also conduct their own credit investigations from time to time.

Why is it important to take care of your business credit? Banks, insurers and lenders use a business’s credit history in determining whether they qualify for business loans or not. The status of your business credit can also make a difference with the rates and the credit limit that will be given to you by your creditors and insurers. Business investors may also check on your business credit history before deciding to support your business. Just like your personal credit, your business credit history directly affects the opportunities extended to your business.

Building Your Business Credit

So what can you do to keep your business credit history in excellent standing? Although some steps are similar in maintaining your personal credit and business credit, there are some additional steps you need to take if you’re a business owner. Consider the following advice from business and financial experts:

Pay attention to your payments. How you submit your payments to your suppliers and lenders affect your business credit rating. Make it a point to pay your suppliers and your lenders on or before the exact schedule of payment. Nothing impresses potential lenders more than a company with a straight record of payments.

Obtain or renew your business licenses on time. Abiding by the licensing rules of your State is part of maintaining an excellent business credit. Don’t overlook or neglect the legal procedures required for businesses. If you fail to do so, this will be reported to the business credit bureaus and can badly damage your credibility.

Do not submit too many applications to creditors at once. Too many inquiries in your business credit profile may send out the wrong impression to future lenders. This is especially true if your application is declined. Before submitting an application to any lender, make sure that it is absolutely necessary and that you’re really serious about applying for new credit.

Limit your business credit cards. Compared to getting a business loan, getting approved for a business credit card is easier. Although having one or two business credit cards is recommended, owning too many is strongly discouraged. Not only does too many business credit cards damage your business credit, they also put you at great risk of getting stuck in debt.


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Using Business Credit Cards as an Essential Tools for your Small Business

Every credit cards made especially for every type of business. Business Credit Cards had been proven as an essential tool for a small business. What are the advantages you can get? Let's find out how.

For small business owners and home based entrepreneurs, the benefits of using business credit cards are too many to be neglected. Consider the following advantages as to why business credit cards are essential tools for every small business.

Manage business expenses more easily. Having a business credit card enables you to separate your personal and business spending. Business credit card issuers also send monthly billing statements as well as quarterly and yearly summaries. Thus, you can easily keep track of where your business funds are spent and use control where it’s needed. These features are especially indispensable as the company begins to expand and expenses start to grow.

Free up your cash flow. It is crucial for a business to have a solid financial resource at all times. A business credit card comes in handy especially when emergency expenses arise. For example, let’s say that you received a large order from a customer at an unexpected time. Even if you don’t have the cash, you can charge to your credit card all purchases that are necessary to deliver the order on time.

Distribute your funds easily. Business credit cards also provide a more convenient way of distributing funds to your employees with the use of supplementary cards or extension cards. If cash is needed in a hurry, there’s no need to go through the long process of requesting for petty cash and wait for approval. Instead, an employee can charge the expense to his extension credit card that is linked to your account. To ensure that the funds are used strictly for business purposes, every purchase is reflected in your monthly billing statement so you can keep track of your employee’s spending.

Manage your account online. Most business credit cards come with an online banking feature which gives the business credit card holder the option to access his account through the internet. This way, you can check your account and send payments at any time straight from your own computer. Any entrepreneur can surely appreciate this convenience.

Get rewarded from your expenses. Many credit cards for small businesses come with rewards. Reward programs vary from travel rewards, gas rebates, and cash backs so you can choose the exact type of program that best fits your business. Enrolling with the right kind of business reward credit card can bring you huge savings and incentives from your spending.

Build your business credit. After registering with a business credit bureau, the only way to build a separate credit history for your company is to acquire new accounts. To build your business credit history, you can choose to apply for a business loan or a business credit card. Once you’re approved for a business credit card, pay attention to how you use your credit limit and how timely you are in submitting your payments. Remember, if you want to enjoy an excellent business credit, you must never exceed your credit limit and you should always pay off your credit card charges on time.

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The Battle between Secured vs Unsecured Business Credit Cards

Having a poor personal credit can be a major disadvantage when trying to start a business. Since you can’t qualify for business credit cards that require good or excellent credit, you are left with two options. You can either apply for a secured business credit card or look for an unsecured business credit card that accepts average credit. Needless to say, both of these options involve higher costs than business credit cards that are reserved for people with good credit.

Still this doesn’t mean you can’t find a reasonable deal. If you do careful research, you should be able to find a credit card company that offers bad credit credit cards for small businesses with reasonable fees and terms. Now, which is a better option for you- a secured business credit card or an unsecured business credit card? The answer of course, may depend on your situation.

The Difference Between a Secured and an Unsecured Credit Card

A secured credit card basically requires a security deposit in your account. This fund will be used only if you failed to keep up with your credit card payments. This way, your credit card company is assured that in case you default from your debts, they can simply tap into your account and use the money to pay your unpaid charges. For this reason, the value of your security deposit would also determine your credit limit. Obviously, the higher the amount of your deposit is, the higher your credit limit would be.

In this case, submitting a smaller security deposit in your account can put a limit on your credit card use. If you need to make large purchases, you may not be able to do so because of a low credit limit. On the other hand, this drawback can also be an advantage since it can protect your business from the risk of extremely large debts.

On the other hand, an unsecured credit card does not require any security deposit. However, because of the greater risk involved, credit card companies charge higher interest rates and penalty charges on these business credit cards. Still, some business owners prefer this type of account because it gives them more flexibility with the use of their credit.

Which One Is Best For My Business?

Clearly, bad credit business credit cards have their pros and cons. Making the right choice would depend on the financial needs and spending style of your business. Whichever you choose however, the important thing to remember is your obligation to pay. Bear in mind that failing to keep up with your payments would only bring more damage to your credit history.

On the contrary, the wise use of your business credit card and the timely submission of your payment are the key to improving your poor credit. Lastly, don’t forget to check if your preferred business credit card reports your payments to the credit bureaus since it is the only way to repair bad credit. After a few months or a year of consistent payments, ask your credit card issuer to upgrade your account to a standard business credit card that doesn’t require a security deposit and with lower rates and charges.


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Reasons Why Companies Should Have Business Credit Cards

Despite the growing popularity of business credit cards, many small business entrepreneurs are still skeptical about them. In fact, most homebased business entrepreneurs prefer to use their personal credit cards for their business expenses as well.

Why are business owners hesitant to get business credit cards? For one, some entrepreneurs think that the application process is complicated while others think that only large business qualify for a business credit card. Others are scared that having a business credit card can lead to overspending and there are some who generally equate credit cards with high rates and fees. There are also some who are hindered by the status of their credit. If you own a business and you feel the same way, perhaps this article can help you realize the benefits of having a small business credit card.

Truth about Business Credit Cards

First of, let’s get these false notions out of the way. Is it really complicated to apply for a business credit card? Not all. In fact, applications can be submitted online and getting approved is just as easy especially for those with excellent credit. But what if you have poor credit? Secured business credit cards grant approval for business owners with less than perfect credit scores.

Do all business credit cards charge high interest rate and fees? Different credit card companies impose different rates and charges but if you look closely, you’ll surely find a business credit card that offers low interest rates and reasonable fees as well. Those with excellent credit can take advantage of the best deal offers by business credit card companies who are more than happy to have them as clients.

Benefits for the Small Business Owners

Why is it worth it to get a small business credit card? Primarily, a business credit card helps you establish a separate credit history for your company. As you establish a strong foundation for your business, building an excellent business credit will help you in your future business endeavors. For instance, if you want to expand your company, applying for a bank loan will be a lot easier with an excellent credit to back you up.

Additionally, a business credit card makes your accounting and bookkeeping tasks so much less complicated. Since all your business purchases will be reflected in your statement of account, you don’t have to worry about missing a single item in your inventory. This obviously comes in handy when it’s time to pay your business taxes.

Keeping track of your business expenses is also made easy by distributing supplementary business credit cards to your staff. Each month, all purchases they charged on their card will be included in your billing statement so you can be sure that your business funding is well-spent. Other benefits include earning incentives from your business credit card use as these credit cards often come with reward programs especially designed for businesses.


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Know the Advantages of Credit Cards for Small Business

Lets discuss the pros and cons of using small business credit cards and how to use them effectively to support your business.

One of the most important aspects of a business is financing. Without a reliable financial resource, a business can easily get into trouble and may even be forced to shut down. Thankfully, there are more than one sources of financing that are available for small businesses.

This article focuses on small business credit cards - its advantages and why entrepreneurs should consider them as a means of financing their small business.

The Pros and Cons of Using Small Business Credit Cards

Stretch your cash flow with the help of credit cards. A business is confronted with a lot of expenses – including the daily costs of operations. There may be instances when cash is short or there is no cash allowance available to meet an unexpected need or customer demand. In these instances, a small business credit card can provide the much needed reinforcement especially when it’s not possible to wait for a loan or borrow.

Track your accounts more easily and quickly. Even small businesses are encouraged to use accounting or bookkeeping software to make their tasks easier and more efficient. Having a small business credit card can also be a major convenience in monitoring your accounts. You can use the monthly billing statement sent by your credit card issuer as a reference for the expenses you’ve made for the month.

Business credit card companies also provide quarterly and yearly account summaries for its card holders. These detailed summaries are invaluable references when examining your business inventory and when filing your business taxes.

Enjoy business credit card reward programs. Business owners should also take advantage of the chance to earn more from their spending. By using a credit card instead of paying for your business purchases in cash, you can enjoy discounts, rebates, bonuses and incentives.

Many credit cards for businesses offer different reward programs such as frequent flyer miles, gas rebates and cash backs. By doing research, you can certainly find a card that best matches your spending style and needs.

Enjoy the convenience of online shopping and online banking. With a credit card, an entrepreneur has the option to place orders or purchase stocks from online suppliers and merchants. You can send payments without having to go to the bank or personally visit the shop you purchased from. An online access also allows you to check your credit card account 24/7. Whether you’re at home, in the office or somewhere else, you can do all these conveniences right from your laptop or desktop.

When you’re running a small business, being able to do both your shopping and banking online is definitely an enormous convenience and time-saver. With your hectic schedule, you can do these two important tasks at any time without hassle.

Credit cards are safer to use. In making large purchases, it is more practical to carry a business credit card instead of cash. In case your card gets stolen, all you have to do is call your credit card company so that your account can be blocked against unauthorized transactions.

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Get More Benefits with Low Interest Business Credit Cards

With so many choices of business credit cards available in the market, surely you can find ones with really low interest rates. Nevertheless, a wise business owner knows well that the interest rate alone doesn’t define a good credit card. In this article, we’ll be discussing how to spot the best low interest credit cards and how you can get more from them.

Spot the Best Low interest Credit Card

How long will the low interest rate last? Some credit cards offer incredibly low interest rates or even zero interests as part of their promotion. Remember that the low or zero interest rate only applies for a limited time. The offer can be good for 3 months, 6 months or up to a year but you need to know exactly how much the interest rate would be when the introductory offer expires.

What are the other costs of the card? Aside from the low interest rate, you need a card with reasonable fees and terms altogether. There are credit cards that offer very low rates yet are packed with expensive fees- late penalty charges, annual fees, transaction fees, balance transfer charges, etc. These costs are often not advertised at all and you need to take the time to read the full Terms and Conditions of the credit card to find out.

In order find the business credit card with the best deal, you need to take your time in studying and comparing your choices. Again, don’t forget to read the fine print. You can also check out credit card review web sites to learn which credit cards have the most potential. More importantly, choose the credit card that best matches your business’s spending and needs.

Get More from Your Low Interest Credit Cards

First, it’s important to use your low interest credit card only for business expenses. Fight the urge to use your business credit card for personal use. Such a habit puts you at risk of uncontrolled or overspending. When it’s time to file your taxes, it would be confusing to determine which of your charges were made for personal use and which ones were for business.

It’s also important to take advantage of the low interest or zero interest introductory period of your card. Since the 0% APR won’t last long, it’s best to enjoy it while it lasts. Charge all important business expenditures to your zero interest credit card and pay off all your balances before the zero interest period expires.

Monitor your spending. Keeping track of your business spending is easier with the help of a business credit card. Most business credit card issuers provide an online access to your account so you can check it at any time. Monthly, quarterly and yearly billing statements are also helpful especially when analyzing your purchases and filing your business taxes. Since these account summaries report your purchases in categories, it would be a lot easier to determine which ones can be tax deductible and which ones are not.


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