What to Look for in a Small Business Credit Card?
Setting up a business for the first time is an exhilarating feeling. You’re finally your own boss, responsible for everything that happens in the office and the welfare of your future employees, or just responsible for yourself if it’s a solo effort. Perhaps you’re setting up an international import/export business or maybe just a small shop to sell your artwork. However large or small the venture, you need to consider a business credit card.
Why is a small business credit card important?
It’s a safety thing. Once you’ve finished filing the paperwork that sets you up in business the business then takes on its own personality. When you’re dealing with legal matters, it’s the business that is being addressed, not you as an individual. In the eyes of the law the business is its own entity. The business has a life of its own, of course it’s still your baby, but it has to make its own way in the world – you wouldn’t want to be personally liable for everything that happens.
It’s the same with credit. You don’t want to be paying wages from your personal credit card or tangling up your business finances with your personal finances. Not to mention that the fluctuation in your personal credit balance could lead to a very erratic credit rating. A drop of $12,000 on your personal account could plummet your credit rating by up to fifty points, that’s the difference between ‘so you’d like a loan…no problem’ and ‘so you’d like a loan…no chance’.
A small business credit card does just that, it represents an account purely for your venture that does not affect your personal credit.
Choosing the right small business credit card for you.
Your business’ credit card is as individual as your business’ identity. And as with any credit card, you need to shop around. The size of your business, the type of business and whether or not you need a loan or a small cash infusion, or if you just need the card for everyday business purchases, will influence the type of card you go for.
Do you need additional free business credit cards for employees? The Advanta Platinum card offers free business cards for employees. If your business requires you to travel then cards offering free air miles and travel point rewards, like the Capital One Business Platinum with Preferred No Hassle Miles card, might be of benefit. Match the perks of the card to your business needs. The options are endless.
Some of the top small business credit cards are Advanta, American Express, DiscoverCard, Chase, Mastercard, Visa and Capital One.
Things to consider…
For the following details look in the terms and conditions of the credit card contract:
- If you want the card for a loan then look for a high credit limit and low interest rate or even a 0% introductory interest rate.
- Find out if the interest rate is fixed or variable. Even a fixed interest rate can change under certain conditions such as a letter from the issuer stating a interest rate rise or a late payment may trigger a higher interest rate.
- Many business credit cards offer instant online approvals
- Look for the reward programs that best suite your business needs: If you have a fleet of trucks then a small business credit card with 5% cash back rewards on gas and auto maintenance would be a great help. Or if there is a lot of travel involved in your business then a card with air miles or hotel rewards would be ideal.
- Find an issuer who offers online banking, paperless online reporting and downloadable expense reporting.
- If you’re planning to expand in the future, check whether there is a charge for issuing additional business cards. If the card issuer does offer further cards, do they provide individual statements on the cards so that you can track individual employee spending easily?
- If the rewards are air miles be sure and look for blackout dates, or a minimum spending requirement each month to activate bonus miles or how many miles are required for a free flight.
- If the rewards are cash back, look to see if there is a limit on the number of rewards that can be realized in a year, what percentage of cash back rewards are offered for which items etc.
We offer a complete directory of small business credit cards. Each credit card includes a chart to help you compare interest rates and fee schedules. You can see at a glance which cards are suited to those with excellent or average credit score ratings. These cards are offered by the major banks and card issuers such as: American Express, Advanta, Capital One, Chase, DiscoverCard, MasterCard and Visa. Many of these cards offer instant online approvals. So don’t wait!