Getting business credit cards is a good idea for many small business owners. These can be great tools for expanding your company and can help you keep track of expenses. Yet, not all of them are created equal. Before you decide when to get business credit cards, you need to make sure that you're getting the best deal possible. Here are some tips for finding the right card for you:
Shop around for the best rate on your card. When you shop around, you'll see that there are many offers out there that claim to offer the lowest interest rates. Be wary of these. If the rate is lower than the others out there, that doesn't mean it's a good deal. You want to get a credit card that has an annual fee and gives you the best credit possible. Look for the name of your card on the offer to ensure you don't have to pay a fee.
Credit cards with higher credit limits are more helpful in the event of a crisis. The higher your limit is, the more money you'll be able to charge to your business account. This means that you'll be able to take advantage of emergencies or even when your cash flow is low. A higher credit rating will also improve your chances of getting credit in the future.
Keep your balances low. By not charging too much money to your business account, you'll also keep your credit rating low. This makes you more eligible to be considered for credit in the future.
Use your card for its intended purpose. Business cards aren't just used for purchasing anything. You should use the card to pay for the things that you need and not just to buy things that you could buy with cash. If you'll use your card properly within a month or two, your credit will gradually improve.
Check your credit card history. The credit card company reports to a number of credit rating agencies. These agencies will give a report to the card company on your behalf when you make your monthly payments. Make sure that you always make your payments on time because failure to do so will negatively affect your credit rating.
Inquire about rewards. Some credit companies offer rewards just for using their credit cards. You can avail of points that can be redeemed when you make purchases. Before you apply for a credit card, make sure that the company you're applying to offers these rewards. Be wary of credit cards that only offer cash back or rewards that don't have reasonable requirements.
When you're starting up your small business, it's a good idea to start with a simple credit card. As you build your business and make more sales, you can then get more cards to give you more flexibility and make your business more profitable. When you need a business credit later on, you can transfer the balance from your cards to one at a lower interest rate. And then again, if you already have other high interest rate credit cards, it's not a bad idea to transfer your balances to those. But always make sure you get business credit when you really need it.
Inquire about low or no fees. Most small businesses have no or minimal monthly fees. These are charged to cover the cost of providing the service to the customer. If you have a credit card at a zero percent introductory rate but a higher than average interest rate, . . . . . . do you think it makes financial sense? Most people who are searching for business credit cards don't take into account the long-term costs associated with credit cards.
Ask about fraud protection. Some credit cards offer protection against fraud; others don't. You want a credit card that provides you with the kind of protection that keeps you safe from fraud. Some credit card issuers will put fraud prevention measures in place for free, while other issuers charge a small monthly or annual fee. Find out what kind of protection you get with your credit card issuer.
Make sure the credit card offers frequent billing. You may not use your credit card on a daily basis, but having the option to bill by month can be very convenient. Business credit cards should allow you to make payments when you have money to do so. Look for a credit card that allows you to make payments even when you're not working, and makes it easy to stay organized by month for your business finances.