With the economy in recession, everyone is looking for ways to cut expenses and tighten their belts. One area that is being heavily targeted by many is the credit card. As more businesses consolidate or acquire smaller businesses, the percentage of business credit card users has been on the rise. If your business has not already adopted this new card structure, now is the time to make the change.
There are several advantages to establishing a business credit card. First of all, you will be able to control spending. You will be able to determine what types of purchases you can make within your business credit card account and what types of purchases you can't. This gives you a great deal of control over how much money you are spending on things within your business. The beauty of having a business credit card is that you can cancel it at any time without penalty. You can also increase your spending limit whenever you choose.
Another advantage to a business credit card is that you can give employees their own cards. This way you can monitor employee spending and help them manage their own finances as well. You will be able to provide detailed reports on all transactions on these cards. If you implement a rewards program, you can provide your employees with a certain percentage of your card sales as a cash bonus when they make purchases.
A third advantage to credit cards for businesses is that they provide a great opportunity for advertising. Many times large corporations will give out free small business cards to their employees. When they make the purchase, the card company will reward the business with a rebate. The more successful the business is with credit card transactions, the more likely the card company will continue to reward them with rebates and more perks.
When you are considering credit cards for businesses, it is important to know if you can actually use them to promote your business. For instance, some cards offer air miles or other incentives for making purchases. However, these incentives will not be as helpful if your business does not do much business in airports or has very few customers. In addition, some credit cards actually charge an annual fee and there are some companies that will raise this fee if your business increases their purchase volume.
Finally, one of the main disadvantages of using credit cards for your business is the high interest rates. These cards will come at a cost, as the interest rates can be very high. These fees will often be several percent higher than traditional business loans. Also, many of these cards will not allow you to issue your cards to your employees unless you have a personal business credit card for them. This limits the amount of business they can take on the card and severely limits how much money you can spend.
To save money on the purchase of . . . . . . a business credit card, it may be wise to start out with a traditional merchant account. This way you can get a credit card from a major company and still build your business. If you want to use a credit card for an in-house merchant account, then you can use a local credit card processor or you can use the Internet. Both methods will give you the option to accept payment in many different countries around the world.
As you can see, a business credit card offers a great opportunity for any business owner. However, as with any card, it is important to look at all of the options before you apply. As you do, you will find that there are many perks to having your own business credit card as well as many disadvantages. By doing your homework, however, you can find the perfect card for your business.