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Understanding Small Business Credit Cards

When you are searching for small business credit cards, you want to protect yourself from wasting money. Wasting money can have your business in bankruptcy in no time.

The major things you should search in a small business credit card are competitively low interest rates, generous credit lines, and of course, good customer service. You do not want a card with a high interest rate, particularly if you carry a balance on your credit card and do not have the time to sit on hold to talk with customer service if you have a problem with the card.

Do some investigating prior to applying for the card by calling customer service in advance. Be sure they are friendly and courteous. Ask them about how they handle late payments. You should try your best to find a small business credit card that is flexible especially if you are just starting out in your business.

While searching for small business credit cards, do not just look for those great introductory offers that may be a great deal for a few months only to lower the boom on you later. You may see that you can get a small business credit card with a 0% interest rate and even 0% balance transfers, however, this interest rate may only be good for the first three months and, more than likely, you will be charged a higher APR for purchases over and above your initial balance transfer. So be sure to read all the small print, including all of the terms and conditions prior to making your decision.

Some of the companies that are now offering small business credit cards have teamed up with other well-established retailers and merchants to give your business other great rewards and discounts on such items as office supplies or shipping costs.

Here are two wonderful credit card companies that offer some great things for small business credit cards. The American Express Business Gold Card has no annual fee for the first 12 months, no set spending limit, savings with leading merchant suppliers such as Hertz and FedEx. You can earn points that can be cashed in for rewards, manage your account online and car rental loss and damage insurance. In addition, the CitiBusiness Platinum Select Card offers a liberal credit line, low interest rate on purchases, free cards for employees, and free 24/7 concierge service.

The best resource for finding small business credit cards is by searching online. You should be able to find more than one website that compares all the major small business credit cards by interest rate, APR, rewards, balance transfers and more. This way you will be able to make an educated decision on which small business credit card is best for your company. The one thing to remember before applying for a small business credit card — be absolutely sure that you have read all of the card’s terms and conditions so that you may avoid any unpleasant financial surprises down the road.

For more on how to use small business credit cards to take control of your business, Robert Alan recommends that you visit CreditCardAssist.com.

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Small Business Credit Cards Offer Businesses Crucial Edge

So, you say you have got a small business and you are looking for a credit instrument that could tailor itself to your business requirements? Well, your search ends here. Small business credit cards fit right in, helping you separate business and personal expenses.

A study by the Tower Group reports that two out of three small businesses use a small business credit
card for purchasing and financing. So why are they so prevalent? Credit cards for small businesses offer business owners a crucial edge allowing them to expand or limit the growth of their business, as needed, providing the flexibility necessary to match their company’s growth needs.

Help with Your Cash Flow: The best use of borrowed finances is to assist with month to month cash flow. Small business credit cards help you get the much needed credit to help your business grow while providing a margin of safety for your cash flow needs.

Maintaining Independent Accounts: Mixing your personal and business transaction accounts could lead to poor money management and potential tax problems. With a small business credit card, you’ll be able to maintain separate accounts on your personal card.

Help Balancing Your Books: This one is thrown in for free. With your card company maintaining an ongoing transaction record, you will have a convenient record of all transaction items that can be reconciled at tax time. Simply have the credit card company provide you an itemized list of all purchases made using their credit card and you’ll have some built-in transparency on all of your spending activities and financial accounts.

Build Your Credit Limit: Small businesses looking to expand need capital. You card provides your business with an opportunity to build your credit limit with consistent use and repayment over time. Access to more capital offers financial muscle to help grow the business, providing larger income opportunities for the small business owner.

Pre-Set Employee Spending Limits: For businesses wanting to keep a tight watch over their finances, these cards usually offer preset spending limits for employees, providing an excellent check and balance system for all your company expenditures.

Take Advantage of Special Offers: The competitive market has forced credit card companies to throw in special discounts and rewards programs. By examining the travel and entertainment requirements of your company, you will be able to grab offers that can help reduce your expenses through the use of reward point systems.

If your existing business partners provide a small business credit card, it is probably a good idea to stick to them as you are more likely to get favorable rates and credit lines with an established credit line. Late payment and other such penalties will have to be borne by the company and not the employee. Therefore, give cards only to employees you absolutely trust and only provide credit limits that are in line with their expenditure requirements. Make sure the card you choose is widely accepted so that it helps meet everyone’s expense item needs.

Small business credit cards are quickly establishing themselves as an efficient way to increase capital and buying power for small businesses. While this calls for responsibility in its management, a small business credit card could go a long way in changing the face of your business for the better.

Robert Alan recommends that you visit CreditCardAssist.com for more information on how to use small business credit cards to take control of your business.

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Business Credit Cards – Smart Choice For Your Small Business?

Small business credit cards can simplify many aspects of a startup business. However, there are situations that may complicate the application process for a small business credit card, resulting in a large financial burden being placed on the personal finances of the individual who applies for the card, or prevent an established business from taking full advantage of the rewards possible with a business credit card. Although business credit cards are usually the smart choice for any small business, business owners must pay attention to the structure of the business, the business plan itself, and the financial burdens that may result in the event of an early business failure.

In an age of on-line payments and multinational business ventures, many small business owners are finding business credit cards to be a smart choice for simplifying payments, organizing expenses, and expanding the capability and autonomy of employees both locally and abroad. Before diving right in and applying for a small business credit card, however, every responsible business owner should ask himself or herself: is a small business credit card the right choice for my business?

There are several factors that can help determine this, but one of the simplest is how long the company has been in existence. Until a company has been around for at least two years, many banks and credit card companies may be reluctant to draw enough conclusions about the company’s financial responsibility to approve a large line of credit. In cases such as these, whether a business credit card is approved or not will depend on the personal financial and credit history of whatever individual–from business partner to simple employee–actually puts in the application for the card. This may not be a problem in the case of a rock-solid personal finance history, but if there’s any doubt, acquiring a good business credit card may be a trickier proposition.

Another thing to watch out for in the case of a startup small business is the question of personal financial liability. Since Santa Clara County v. Southern Pacific Railroad in 1886, corporations have had the legal status of individuals, except insofar as business credit cards for startup companies are concerned. The first years of any business are the hardest, and in the case of company bankruptcy, any outstanding financial obligations based on a business credit card will be the original applicant’s responsibility to meet. In the case of a large financial obligation, this can be a disaster for personal finance. Of course this is no argument against small business credit cards in all cases–far from it. However, any company interested in setting up a small business credit card would be wise to double-check its business plan and make sure that, in the rare event that the worst occurs, a “Plan B” for paying off the credit balance is firmly in place.

Even established small businesses would do well to examine their financial needs before taking the plunge with a business credit card. In the case of a business which involves a great deal of travel on the part of its employees, a large on-line business component, or a wide variety of expenses that require the business to deal with a number of different suppliers, a small business credit card is virtually essential. However, some small businesses are largely local, largely service-based, or have only a handful of employees authorized to make purchases. In cases like this, the reluctance of a few business credit card providers to allow disputes over billing errors or payments may actually complicate expense reporting and year-end inventories–sometimes a very real problem in the case of small businesses that have expanded far beyond their original business plan or intentions, resulting in a draconian system of purchaser agreements and expense accounts. So the decision to apply for a small business credit card should be made carefully, with defined uses for the card well in place, and a possible light restructuring of the business might even be warranted in order to ensure that payment responsibilities and individual employee purchasing requirements are well-defined in order to avoid possible later problems.

With all of these caveats, are business credit cards ever a good idea? Absolutely: these caveats represent only a few problems, nothing compared to the wealth of tools a good small business credit card can provide for a burgeoning small business. A good business credit card can–and usually does–simplify inventory management and tax reporting, allow employees a greater degree of autonomy on travel, make e-commerce easy, and, depending on “rewards” or travel mileage options, can even directly offset a large share of the expenses for some businesses. So yes, a small business credit card is, in the majority of cases, the smart choice for a small business. But as with all financial matters, care should be taken to determine when that smart choice should be made, or whether the business is structured to take full advantage of it.

For more information on how to contrast and compare business credit cards in order to help secure the best card offer for your business, Robert Alan recommends that you visit CreditCardAssist.com

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Small Business Administration Awards Luncheon. by Jay Baker at Baltimore, Maryland