As a small business owner, perhaps you have given thought or have already applied for a business credit card. This article discusses the five fundamental truths about credit cards for business.
Good credit means access to good rates. If you have good personal or business credit, then you have the privilege to qualify for business credit cards with the lowest rates. You can even try to negotiate and request for a better deal. It would be great to check your credit report first prior to applying for a business credit card to make sure that there are no errors which could cause your score to drop. But what if you have bad credit? In this case, you have the option to apply for a secured small business credit card, but these credit cards require the submission of a security cash deposit.
Different issuers have different rules. The terms and conditions vary from one business credit card to another so you will have to spend time reading the Agreement page to make sure that there will be no unfair conditions or unreasonable fees. If there are clauses in the fine print that seems vague, be sure to talk to a potential issuer about it.
Not all credit cards are for you. There is not one business credit card that is ideal for all types of businesses. This is especially true if you want to apply for acredit card with rewards. Some business credit cards offer travel rewards while others offer cash back and rebates. Benefitting from your business reward credit card will largely depend on your choice and afterwards, on how you manage your account. Therefore, you need to make sure that the reward system matches with the spending needs of your business.
Introductory offers are not permanent. Keep in mind that introductory offers are not a permanent deal. A business credit card can offer a low introductory rate good to last for six months to a year, but you also check out how much the regular interest rate would be when the promo period expires. Other factors to consider are the fees such as late penalty, balance transfer, over-the-limit, and other finance charges.
How you benefit is up to you. Small business credit cards can be wonderful tools for business owners but how you benefit from them greatly depends on how you use them. To avoid paying extra fees, cardholders are strongly advised to pay their balances in full each month and to keep within your credit limit. Some business credit cards offer deferred payment for large purchases. If this is the case, don’t forget to submit your monthly payments on time to avoid late penalty charges.
Not all issuers report to business credit trackers. You can establish and build business credit with credit cards for business. However, take note that not all issuers report your payments to the business credit bureaus like Dun & Bradstreet. See to it that your chosen business credit card offer credit reporting to business credit bureaus.