Business Credit Cards are not just for large corporations, they can be used by any size business. A business credit card enables even small companies to purchase goods and services on credit, with the promise to pay at a later date. Business credit card issuers differ greatly in their products. The fees, interest rates and terms for business credit cards vary greatly and comparing companies and cards can be very important. Here are some tips on getting the best credit card for your business.
Tip Number 1 – Credit Report
Often the interest rates and terms for a business credit card will be dependent on your personal credit rating. If the business is new, or it is a small business, the issuer will look at your personal credit rating. So the first step in shopping for a business credit card should be making sure that your credit report is correct.
Pull your three credit reports for free and make sure the information on them is correct. Try https://www.annualcreditreport.com/cra/index.jsp. This is a central site where you can request your free credit report on an annual basis. This site will provide the information from all three of the consumer credit reporting companies. These three nationwide companies are Equifax, Experian and TransUnion. This site will also allow you to submit almost all of the changes or discrepancies online.
Tip Number 2 – Secured Business Credit Card
If you have bad personal credit it might be difficult to get a business credit card. There are things you can do to improve this standing so that eventually you will be able to get a business credit card or business loan. One of the options is to apply for a secured business credit card. You can apply for one online or through many financial institutions. A secured card will require you to make a security cash deposit that is equal to the credit limit you are asking for.
Once you get the secured business credit card, you can use it for your expenses. It will allow you to make online purchases, pay for travel and be utilized as you would any business credit card. Then as you make your monthly payments, you will rebuild your credit history. Make sure you choose a provider that reports your business credit success to the reporting services.
Once you’ve had the secured card for a year, you can request that your status be upgraded to a non-secured account. Some of the credit card issuers will do this automatically, but make sure you understand the guidelines for your upgrade.
Tip Number 3 – Compare the Business Credit Cards
All business credit cards are not created equal. Terms, interest rates, rewards and other options vary greatly. You need to make sure you compare all the information. Some cards have annual fees, and the annual fees can vary greatly from $75 or so a year to several hundred. The same thing is true with interest rates. They can vary by double digit percentage points so make sure you evaluate all the options. If you are comparing introductory offers for business credit cards, make sure you know how long the introductory offer is for, and what the terms and conditions are once the introductory term expires.
Besides comparing the basics, consider how you will use the card and make sure to look at the extra fees and benefits. For instance, if you travel a lot, does the card provide flight insurance or car insurance on rental cars? If you travel overseas, what are the fees to convert charged purchases from the currency of the country you are in, back into US currency? The conversion fee can vary from 0% to 3% and higher.
Don’t forget to look at the rewards programs. Do you get cash back? Or points for travel and other purchases? To utilize these rewards do you have to hit a specific threshold? For instance, there is one business credit card out there that requires you to make $100,000 worth of purchases in a year before you can really utilize their rewards.
Summary
With so many options out there it is well worth spending the time to research the different cards and card issuers. Things change fast, and there are new cards and options coming out all the time. Do a comparison of any business cards that you have at least once a year to make sure you are still getting the best deal, best service and have the right business credit card for your company.
loading...
