Business credit cards are the first step in a small business's journey to financial invoicing. They help the company set up an effective method of billing and payment. In order for the company to establish a good credit history, all expenses have to be recorded, both the direct and indirect ones. Credit limits also depend on individual needs of the business. The best business credit card should be able to meet any business's needs.
There are two types of business credit card: charge card and non-charge card. Each has its own pros and cons. Most businesses use charge cards because they carry less interest rate and a longer grace period for payback. They can easily transfer the balance from other credit cards to the new card and can also receive rewards for every dollar spent.
A business credit card has benefits and drawbacks. A business credit card with no annual fee will provide you with a higher credit limit and a lower interest rate. It is the best option for a small business that regularly makes purchases without billing. The main disadvantage of business credit card is that most companies do not report your business credit card transaction to credit bureau. This means that when you do pay your bills, they will not make it to the credit bureaus.
When you apply for a business credit card, you must have a good to excellent credit rating. If you have bad or no credit at all, business credit card application will be declined. There are many reputable companies that give business line of credit to people with poor credit rating.
Most credit cards come with a number of added advantages. It offers the convenience of paying online because transactions can be done directly without going to the bank. A credit card can be used to make online purchases as well as many other things like gas, entertainment and groceries.
Business credit card also allows entrepreneurs to run their businesses from any place. All they need is a laptop or personal computer. You can use your business credit card to pay online bill. This feature is also called “virtual credit card”. Another great advantage of a business credit card is that it offers many reward programs. Rewards are mainly based on the amount you spend.
There are three major credit card networks in business today. They are American Express, Discover and Visa. Each network has different features that business owners should look for. Among them is a reward program.
Different companies offer different rewards. It will depend on the kind of business you own and the kind of customer you cater to. The best thing about using a business credit card is that you are not required to keep a set balance each month. As soon as your billing cycle end, you can use the money to its maximum amount. So, if you can, you should start saving money even before starting your business. Also, try to find out a business credit card that fits your monthly budget because it will increase your business profits.
Business credit card with rewards are usually issued by banks with low interest rates. However, you can find some with zero percent APR or even lower if you shop . . . . . . around. In most cases, banks offer rewards depending on the amount you charge to your business account. This means you can choose the best rewards program for your business.
Some cards offer free business insurance while others provide free air flights to your business location. Again, you can choose which ones you want. It is important to know how much your business needs so you can allocate your available funds for it. Otherwise, you will just be wasting your money.
As a business owner, you should know that dealing with business credit is a delicate situation. You need to make sure you get all the details and information from the company or bank you choose. This is your business. You cannot risk losing it by choosing to deal with shady company or bank. It will even put you in a compromising situation.
Finally, when you apply for a business credit card with rewards, you need to ask about the terms and conditions. Most of these companies offer different rewards programs but make sure you get everything in writing. If not, you might be losing your chance to enjoy all the perks offered by the card. Read the terms carefully and choose the company or bank wisely.