Business credit is essential to your business. Thus, choosing the right business credit card is vital for start-up companies, small businesses or even those established businesses. Small business owners can use business credit cards for start-up capital and in times of need when business is slow. Once they get their business up and going, then they can repay the debt that they owe when they can afford later on. Being able to use a business credit card in times like this can be priceless.
Know the Pros and Cons
There are many credit card companies out there which have their own pros and cons. Finding the right one for your wallet and your business is entirely possible if you only take the time to learn a little about each one including their terms and conditions. This will help you to avoid any upsetting surprises down the road. It is important to remember that while these business credit cards are extremely helpful to those that are starting up a business and those that have a successful one, these card companies are not in it just to be useful. They are giving these cards to business people like you to make money. As such, many of these credit card companies are even adding special perks such as rewards like airline miles and even cash back incentives.
Typically, your personal bank can send you offer for their line of credit cards that might include very attractive features and benefits. Even other banks and card companies regularly send out business credit card applications. Hence, most small businesses and even large companies will take the first credit card offer they receive based entirely on the fact that it came from their banking institution. Most of the time, business owners end up applying for these offers before even attempting to compare business credit cards because of the recognition and comfort level that the local institution provides them. Although this sounds great, it is not usually best to be compulsive.For a start-up, you will want a business credit card as soon as possible while other card companies may not know of your existence yet. But once you have established your business, more credit card application offers should start pouring in.
A new business will have a non-existent credit history and different needs than established businesses. If you are a new business, you must be aware that the credit card company will look at your personal credit history first. The business credit card companies know your start-up needs; thus, they properly anticipate that new small business owners will be seeking a business credit card sooner than later. This is where the setback comes in – when you want one as soon as possible instead of waiting to properly research and select one. If you are an established company, the credit issuers will draw upon the credit history of the business entity itself, not your personal credit history. One flaw in your business’ credit history could stop the application dead in its tracks.
There are many different business credit cards out there so you should be very careful in which one you choose. Also, you need to make sure that you can afford to get a business credit card or several business credit cards before you actually sign any papers. For instance, if you are using your business credit card to start up your own business, you may want to consider how this debt may affect your future finances. If you think that your business will not make it soon enough, then you should try to come up with another way of getting your start-up money. If on the other hand you think that your business is sure to succeed and you will be able to repay the money, then you should go ahead and apply for one, even if it means getting into debt with a business credit card.
Factors To Consider
It is essential that you shop around and find the business credit card that is the best for you and your own situation. The following is list of some of the things to consider before signing up for a business credit card:
1) Evaluate interest rates, joining fees and late payment fees
2) Compare the annual fees (some waive the fee for the first year)
3) Consider the credit limit offer (maximize, if possible)
4) Compare the rewards program (cash rebates, airline miles, discounts)
5) Understand the repayment terms and grace period
6) Check if cash advances and withdrawals are allowed
7) Check the online banking and balance transfer features (if allowed)
8) Compare special perks and other extra benefits
No matter what business credit card you choose, there may or may not be catches to it, which is why it is up to you to decide which one works the best for you and your business.