Business Credit Card

Business credit cards are credit cards that are used for business purposes and consider the credit history of the business. This website will provide valuable information about business credit cards so that you can decide if your company should get a business credit card.

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Business Credit Card - Info
For both small and big businesses, financing is a big, and often times, a troublesome issue. Whether it is equipment, machinery, or day to day expenses, having money available to use on credit is an important part of a business’s success. That is where the business credit card comes in. With it in hand, a business owner has a certain amount of financing available at a moment’s notice for whatever the business may need to run successfully. In addition, there is the opportunity for rewards, incentives, and even some financial advantages that accompany a business credit card. Consider, then, some of the most important things one is going to need to know about business credit cards.

Why Do You Need a Business Credit Card?
There was a time when both private citizens and business owners used cash for all transactions. When money had to be borrowed, the owner went to the bank, filled out an application, put up collateral, and got the money. Today, though, that is just not practical, which is why any business needs to consider the use of a business credit card. Here are a couple of reasons why.

The first reason to consider a business credit card for your company is that they are simply easier to get than a line of credit. Large corporations may be able to get a line of credit they can use for purchases, but as a small business owner that option may not be there for you. A business credit card will help you secure the credit you need.

Why, though, do you need credit at all? As a small business, you want to conserve your cash. Cash is there for those small purchases, to make change for customers, or to make quick business transactions. In addition, you can then use that credit to move your business forward through the purchase of equipment and supplies.

Many small business owners use their own personal credit card for purchases. Consider, though, that this may not be the best way to go. There are advantages you can get from your business credit card that are not available from your personal card. Getting a business credit card for your small business just makes sense on so many levels.


Advantages of Having a Business Credit Card
Now you understand why you may want a business credit card as far as line of credit goes. Consider, though, that there are some very specific advantages of using a business credit card over the use of one of your own personal credit cards. When you look at the following advantages, you will see that a business credit card is just a much better selection for your small business. Here are, in fact, five of the top advantages to using a business credit card.

First of all, you can get a higher credit limit with a business credit card than you would with your own personal card. For a small business, even a line of credit may be difficult to secure, so the $50,000 credit line your business credit card gives you will be good working capital for your business. Also, it is more than likely far more than you would likely ever have on hand as cash. That may seem like a lot of money, but consider the possibility of an emergency situation where you need to buy equipment or supplies fast.

Secondly, your business credit card can boost your business credit overall. When you do need that bank or loan office line of credit, the card will have helped your business establish some credit rating. Because of this benefit, be sure to use suppliers who report their and your transactions to credit bureaus.

By using a business credit card, you will also be able to protect yourself. The card is for the business, stands alone as the business, and keeps you from risking personal credit on business ventures. In addition, you will be able to easily keep your business and personal transactions separate come tax season.

As a final point, having a business credit card can help you control employee spending. By placing limits on their cards or simply keeping an eye on balances, you can see what they are doing. Often times, employees think the money is limitless for a small business, and with this you can prevent that thought from causing you problems.

What to Look For In a Business Credit Card
Once you decide to take the leap and you decide to obtain a business credit card, you have to consider what it is you want in one. Not unlike a personal credit card, your business credit card is a decision not to be taken lightly. Take some considerable time to think about all of the things you desire from the business credit card before you begin applying for one.

First, look at the fees associated with the business credit card you are considering. Most all business credit cards have an annual fee and the annual fee varies from one card to the next. What you want, though, is to find the card that has the lowest fee in comparison to what you get out of the card. Once you know what your fee is worth to you, the decision about which business credit card to apply for will be much easier.

Secondly, and perhaps most importantly, consider the interest rates. Obviously, you want a business credit card that will offer you the most desirable rates possible. The lower the rates, the more you can afford to carry in terms of monthly balance. In a dream world, you may not want to carry a balance, but in business things happen. Finding the right interest rate for you may take some shopping around, but this is not a decision you want to make quickly anyway.

As a final point, consider any perks your card may give. Just like personal credit cards, there are business credit cards that give you cash back, airline miles, rounds of golf, and even small business equipment. Look for the business credit card incentives that will fit you and your business best.

Rewards Options and the Business Credit Card
One of the factors you will likely consider when choosing your business credit card is the rewards. There are a number of business credit cards that offer reward incentives and nearly as many different types of rewards you can earn. Consider some of the options when choosing which credit card to use for your small business.

Perhaps the most popular incentive available from credit cards is airline miles. In most cases, you earn a mile or more for every dollar you spend on your credit card. Depending on which airline and which credit card you are using, you can eventually earn round trip airfare to anywhere in the country or world. If you travel often for your business, for pleasure when taking time off from your small business, or just want the opportunity to do so, this may be your best bet.

Another reward options you will see often times is the cash back option. Some credit card companies offer business cards that will pay back somewhere between 1 and 3 percent of all of your purchases. This cash back is usually paid at the end of the year when you have the card. You can roll it back into your payments or just take the money.

When it comes to a small business credit card, you may want to consider one that offers business related rewards. Some cards actually offer equipment. What you can get for free usually depends on how much you spend per year. The more you spend the better the equipment and supplies you can get.

There are many other incentives offered as well. From vacations to golf to vehicle discounts, there is a business credit card offering something for everyone out there. You should, though, make sure that you choose an incentive that means something to you and will most benefit you, your business, or preferably both.

Where to Get Your Business Credit Card
Once you have decided that you are getting a business credit card, and once you know what you are looking for in terms of interest rates, incentives, and limits, it is time to go looking for your card. Where, though, do you go to get a business credit card? There are a number of options available.

The first option that may come to mind is to check the Internet. It is true enough that you can find a business credit card application online and that you can fill it out and get it in a relatively short period of time. The problem with that, though, is that you have no control over what is going on with the card. On the Internet you basically apply for the business credit card and wait for an approval—there is little to no interaction between the company and the business owner.

You may feel more comfortable working with a bank because you can deal with a bank and get personal attention. While the Internet can be a great resource for such things, it may actually not be the best place for you to get your business credit card if you feel more comfortable working with people face-to-face. Another option would be to talk to your bank. If you secured a business loan to open your business and are in good standing with them, find out what they offer in terms of business credit cards. Again, in a face to face meeting, you are going to be able to negotiate better credit card terms. You will also be able to more thoroughly understand available rewards.

There are of course, alternatives to visiting your local bank to get a business credit card. As an alternative, you can try calling a credit card company directly and speaking with a representative. In fact, if you have a personal credit card, call the company that supplied you with your personal credit card and see if the company offers business credit cards. Building off of an existing relationship with your current credit card provider may help you get better deals on a business credit card, and because of your existing relationship with the credit card company, the company may be willing to work toward establishing a customized card for you and your needs. The Internet just does not allow that interaction and potential for bargaining, as the experiences of applying on the Internet is often an impersonal one.

Employee Options
One of the most underrated advantages to business credit cards is the ability to control and track employee spending. Depending on what type of business you have, you may need copies of the company credit card to go to your employees. A good card will help you to keep track of what they are spending and how they are spending it.

With a good business credit card, you should be able to get as many copies of the card that you will need for employees to use at your discretion. Each will have his or her name on the card and the employee will be responsible for it. That, though, is not the key to a good business credit card for your employees. What is really nice is a card that allows you to set limits for individual cards and thus employees. With preset limits, you will remain in control of how much each employee is allowed to spend.

In addition, getting separate statements or at least statements itemized by card used should help you track who is spending what. Such knowledge can help you make decisions about budget and about employees themselves. You will be able to question purchases and talk to employees about tempering their spending or at least making sure it is earning you a return. Plus, you will be able to keep a sharp eye on your business expenses, and in turn, a keen eye on your business’s bottom line.

As you can see, there are a number of ways your credit card can help you handle employee spending. You can set limits, track purchases, and can do so with as many employees as possible. Your business credit card, then, can serve as more than just funding. It is like an accounting tool in many ways and will help you manage your finances.

Business Credit Cards versus Charge Cards
There are basically two types of business credit card. You can get the credit card or what is called a charge card. Often times, the terms are used interchangeably, but that is simply inaccurate. Instead, there is a fundamental difference and one you should note.

A business credit card is exactly what you think it is. You make purchases with it that are in turn, financed for you. You can pay the entire balance if you wish to avoid any finance charges, but you can also carry over the balance and pay interest on it in addition to a small monthly minimum payment.

On the other hand, a charge card is a little different. With a charge card there is no interest charged for the card. However, it is necessary to make your payments for a given month within that month. In other words, you cannot carry a balance with a charge card. In the end, you will need to decide whether a business credit card or a charge card is what you need to manage your business finances. Whatever card serves your immediate purposes most efficiently will be the deciding factor when choosing between a business credit card and a charge card.

Managing Your Business Credit Cards
Once you have done all of your homework, have your ducks in a row, and have received actual cards for you and your staff, the hard part starts. That is right, you have not even gotten to the difficult part of business credit cards: managing them. Managing your business credit cards is essential to your business’ financial success.

The first thing to do is limit card hopping for yourself and any partners you may have. If you sign up for several credit cards just to take advantage of deals, you can end up negatively impacting your business’ credit rating. In addition, having too many credit cards can make it difficult to manage the balances and transactions.

Another bit of advice when talking about a business credit card is to use your grace period. Most of the small business credit card companies will allow you a 21 day grace period for making payments on a purchase. Use that time so that you have cash flow for that extra 21 days.

Also, always pay online. How does that help your credit card management? It actually does so by saving you time, laying everything out in front of you, and making it easier to pay early if you have the chance. Paying your business credit card online, frankly, just makes sense.

Don’t forget to closely monitor all of the spending that you and your employees do. By using the Internet you can monitor every transaction. Look for transactions that seem out of place or unusual. Also scan your statement for excessively large purchases. If you note anything unusual, don’t hesitate to contact the employee that made the purchase and if necessary, contact the credit card company to question the transaction. Ultimately, it is your company that is responsible for the bill—be prudent about your companies’ spending habits—it will protect your business, your credit rating, and your business’ bottom line.


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