A business credit card is a financial tool that can help company owners finance purchases and keep their personal assets separated from their professional assets. Small business owners often operate under the assumption they cannot obtain this type of credit card. This is simply not the case. There are options available for any size business and even for those with bad credit. The benefits of having a business credit card can add up fast.
Credit Cards for Small Business Owners
Don’t let the name fool you; corporate credit cards are available for small businesses. Even operations that are run solely by the proprietor can qualify for business credit card offers. There are two main types of credit cards available for businesses:
Standard cards – These cards function like a regular personal credit card, but may have larger lines of credit attached to assist with the purchase of necessary business items.
Bad credit business cards – Companies that do not have the best credit can qualify for higher interest rate business credit card offers or secured credit cards. Even when poor credit is an issue, obtaining a card does have its advantages for a company.
Benefits of Having a Business Credit Card
Business credit cards can be important tools in the corporate world that enable companies to do a number of things. The advantages to having a business credit card for use include:
Easier tracking and control of expenditures – A business credit card provides a paper trail for purchases and expenses. This can prove rather important for assisting in keeping a budget in line and also at tax time when receipts are needed.
Having access to immediate funding – A business credit card can provide funding for important purchases when no other source is available. This can prove especially important during the start-up period.
Pitfalls to Watch Out For
A business credit card can provide a number of benefits, but it can also become a double-edged sword. Some of the potential pitfalls of having and using a card include:
Interest payments – Unless a business card is paid off with each and every monthly statement, interest charges can add up quickly. These can eat into profits and impact the bottom line.
Damage to credit – If a business is unable to pay its credit card bills for whatever reason it does run the risk of damaging its credit. This can damage a company’s credit score and increase the cost of financing down the road.
Applying for a Card
Although business credit cards have their pros and cons, many companies find them essential for getting the job done. With this in mind, it is important to seek out and apply for the best offers. The things to pay attention to on this front include:
Annual fees – Business credit cards generally come without annual fees. Seek out offers that do not charge companies for the privilege of having a revolving line of credit.
Interest rates – Many business credit cards come with a low introductory rate and then see a hike down the road. Pay attention to the rate offers and understand when and by how much rates will increase.
The fine print – A business credit card can end up costing a company a lot of money if the fine print is not fully understood. It is imperative to read this to have a handle on late charges, penalties for nonpayment and so on.
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Business Credit Card Truths Most People Don't Know
Business Credit Card Truths Most People Don't Know
Jordan Valley Dermatology - 428 S. Durbin St., Suite 103 Casper, WY 82601 - (307) 265-2936
