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Choosing a Credit Card as a Business Owner

Thinking about getting a credit card as a small business owner? You may have read a review of business credit promotional cards, but perhaps you are still unsure about how to go about choosing a card. There is a wide range of factors that business owners need to take into account before they sign on. There are things like determining the importance of cash back offers, or deciding how important annual percentage rates are for you and your company. Read on for some extra help in choosing your card. Before that, checking out the advantages of a business card over personal cards can be a good idea.

Advantages of business cards

  • It allows you to easily separate the financial tractions that you make by a personal card and a business card.
  • You get considerable reward as points on almost all business expenses.
  • You can have a much higher credit limit as compared to the personal credit cards.
  • It allows you to have extended warranties, purchase protection and various merchandise discounts.
  • You can have several travel related perks such as free hotel stays, travel insurance and travel credits. Moreover, if you are an elite member, you have the key for more special offers. It includes offers in hotels and airline services.
  • You can have enhanced business credit scores.
  • Also, it creates a positive impact over your business, in terms of its credibility and employment.

How are business cards different from personal credit cards?

So what is the deal with these types of cards? A review of business credit promotional cards will reveal that these kinds of cards will appeal to entrepreneurs and small business owners in a variety of ways. For example, a card may provide cash back offers that can be applied to company purchases. Another card may waive service fees if you are purchasing technology or other specified equipment. The details will vary between card providers, which is why it’s a smart idea to read about the different offerings for each card. There are a number of differences between a business credit card and personal credit cards, which can be noted as follows.

  • Interestingly, business credit cards do not come under the category of Credit Card Act 2009. However, still some providers include the protections laid down in the Act. Making sure of the different terms and conditions with the provider can be an excellent idea.
  • Business credit cards generally do not get its reflection on your personal credit report. It includes the condition to clear the payments in a regular fashion. However, if your business credit card goes to a negative status, it can affect your personal credit report as well.
  • In the general case, the card applicant is held liable for the credit account. Also, most business credit card processes require a personal guarantee. That is certainly required for obvious reasons of finance security.
  • The personal credit card scores and business credit card scores are considered to be two different things. It is important to have multiple business credit card scores. The three main categories of business credit cards are Equifax, Dun, Experian and Bradstreet. It is to be noted that all four of them carry out calculations pertaining to business credit card score in different and independent manner. This calculation largely reflects your business credit card profile.

What are the Necessities?

Yet before you pay attention to the more exciting parts, you need to take a look at the necessary components to a suitable card. A review of business credit promotional cards will include analyzing the APR and monthly interest rates. Is there a fee for overdrafts or over limits? What about card activation and the set number of transactions that need to be made each month? These are important factors to consider before you sign on to be a cardholder. If you are more interested in amassing cash back points, then you should look for a card company that offers that. If you want to know more about the fees that are included in the card’s APR, then a financial adviser may help you with that.

Choosing a Card that Suits You

Before you completely sign on to a new business credit card, be sure that the card includes features that appeal to your lifestyle and spending habits. For instance, some cards will offer discounts on travel deals and other global adventures. Other companies extend special cash back offers to their cardholders, or only to those who are small business owners. You really do need to sit down and check the fine print to see if there is a card that is well-suited to you and your plans. Reviewing your business expenditure effectively can help you choose the best credit card. Moreover, tracking down the various aspects and identifying categories like travel, dining, or advertising can be beneficial. Before choosing a credit card as a business owner, reflect upon the following questions.

  • Does your business require frequent travel? If yes, then for whom, you or your employees?

Choosing a credit card that does not have any charges over foreign transactions can be great. Moreover, some cards even provide you with ample opportunities to earn travel rewards. For instance, if you are looking for something in these contexts, The Business Platinum Card from American Express offers around 5X membership reward points on hotel bookings and flight bookings over various platforms.

  • Does your business entail the dining requisites for people?

If yes, consider a card that rewards dining purchases efficiently.

  • How do you consider paying for typical business resources like shipping charges and phone billings?

These are the expenditures that focus on the common aspects of any typical business. Eventually, you can consider cards that are rewarding in these aspects. For instance, The Ink Business Preferred Credit Card offers 3X points per $1 on the first $150000 spent in such combined purchases.

  • Consider the various added benefits.

Streamlining expenses and eventually earning reward points for various categories can be appreciated.  Apart from that, business credit cards can also provide some special account management tools, financing offers, and extended warranties.

Well, that seems fantastic! Scroll down to uncover the various prospects of considering an added benefit for your business.

  • How to compare cards?

Imagine, you have two credit cards, one in each hand. Moreover, you make financial transactions from both of these. How to choose the best hand for your business?

  • What about the special financing offers, if any?

Many business cards offer into 0% APR periods. These are applied to the new purchases and can be counted for as long as 15 months. During this period, you are allowed to carry a balance without incurring any interest charges.

Do credit cards offer insurance and purchase protection?

Business credit cards may offer a suite of purchase protections. For instance, you may be offered an extended warranty coverage and various insurance offers. That may include your travel insurance and cell-phone protection.

In conclusion

Apart from the various financial parameters to choose the best business credit card for yourself, checking the credit limit can be great. Though credit limit is a function of multiple things, including your credit risk and profile, it can still be reviewed and considered for a suitable selection. It is essential to understand that like a personal credit card, the business credit cards also reflect your business credit report. So, handling it properly and responsibly can be a good option.

Peter Christopher

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