Business Credit Cards

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It really doesn’t matter whether you are a small or large business owner. A business credit card is something that most have to make things easier. That is why I wanted to discuss them with you.

Like most credit cards, you can go to the bank and apply for one. However, with a business credit card you must have a legal business entity. If you are a sole proprietorship, you may have to create a DBA in order to apply but most will allow you to use your name as long as you are registered and have a business banking account.

A business credit card has several differences than a personal credit card so let’s take a look:

1.    Of course having good personal and business credit will increase the chances of you getting a card. But one difference that can help you get a card is if you are current in all of your licensing and insurance policies. This helps the bank and credit card lender understand that you are serious and keep on top of things. Nobody wants to lend money if they don’t think they will get it back.

2.    Having a single business credit card also allows you to create more cards under the same account with set spending limits. This allows you to give your employees cards without worrying about them maxing out the entire account.

3.    Keeping track of all your bills can be a hassle. If you use your credit card for all of your spending, you will have all of your spending information on the monthly statement. This can be extremely useful for tax auditing and just to keep track of everything.

4.    Choosing a reward card is a great option. Business expenses add up quick and the points will to. But before deciding on a card, be sure to check out the types of rewards that can be redeemed. Some cards offer cash rebates and others may offer discounts to items you frequently purchase. You may even be able to negotiate some special terms in your favor.

5.    Business credit cards are usually given higher spending limits compared to personal ones. This makes it even more risky in terms of spending more than you can pay back.

The best piece of advice I can give you is to be mindful of your spending. Credit cards should never be treated as loans. The high interest rates, usually between 17%-20%, make it nearly impossible to pay back large balances owning.

The better lines of business credit cards are by MasterCard, Visa, American Express, and Discover. Each one has its own pros and cons so it is important to take some time when choosing one. Some will offer lower interest, some will have a yearly fee for points programs, and others may have perks at certain stores, hotels, and airlines. Depending on your company’s financial needs, you will have to decide.

Getting a business credit card is just as dangerous as a personal credit card. It is extremely convenient to pay with plastic, but at the same time it can turn in to financial disaster. Always have a limit that you can afford to pay off each month and never let your card get in to the wrong hands. The next time you’re at the bank, ask to make an appointment for obtaining a business credit card.

The best piece of advice I can give you is to be mindful of your spending. Credit cards should never be treated as loans. The high interest rates, usually between 17%-20%, make it nearly impossible to pay back large balances owning.

The better lines of business credit cards are by MasterCard, Visa, American Express, and Discover. Each one has its own pros and cons so it is important to take some time when choosing one. Some will offer lower interest, some will have a yearly fee for points programs, and others may have perks at certain stores, hotels, and airlines. Depending on your company’s financial needs, you will have to decide.

Getting a business credit card is just as dangerous as a personal credit card. It is extremely convenient to pay with plastic, but at the same time it can turn in to financial disaster. Always have a limit that you can afford to pay off each month and never let your card get in to the wrong hands. The next time you’re at the bank, ask to make an appointment for obtaining a business credit card.