As you start a business, you'll be paying out money left and right for various fees and supplies needed to get things going. If you're expanding your business, you'll most likely be in the same situation. One of the best ways to handle expenses for your business, whether they are start up costs or ongoing incidentals that occur, is to obtain a
business credit card. With a business credit card, you'll have an organized reporting of expenses in addition to a quick and easy way to pay for your purchases.
Choosing the best business credit card takes a little more research than finding one for your personal use, but the time spent educating yourself on credit limits, interest rates and repayment options will pay off in the long run.
Corporate Credit Card or Business Credit Card? A corporate credit card has no interest rate, but it does require either a monthly or annual fee to keep the card. It's a good idea to find a corporate charge card that offers a single bill for all the charge cards on the account, as this will save you time and expense of writing multiple checks to pay for the charges. Just be sure that the employees who have access to the cards are using them for business purposes only- and if there is any question about the honesty of your employees, you may want to get itemized listings for each card so you can track each person's usage on a monthly basis.
A business credit card is not all that different from a personal credit card. Business
credit cards generally have a credit limit, and minimum monthly payments to pay. When lenders are deciding whether or not to extend a business credit to a company, they will look at the business owner's credit as well as anyone else's credit who will have permission to use the account.
Evaluating Interest Rates If you decide to go with a business credit card over a corporate card, you'll want to pay close attention to the interest rates of any cards you are considering. While promotional rates that scream 0% APR sound wonderful, don't forget to check into what that rate will change to once the promotional period has ended. A 0% interest for six months that later changes to 29% is not as good as a card that offers an always low interest rate of 8% or so. Your other possibility is to obtain a card with an introductory offer, and before the time period ends, transfer your balance to a new credit card with a 0% introductory offer. It all depends on whether or not you want to be bothered with the constant applying and transferring of funds.
If you've decided to use a corporate credit card, look for a card with a monthly or annual fee that is reasonable in comparison to the amount of spending you believe you will be doing with the card. Also find out what services the card includes, sometimes paying a higher annual fee is worth the money in return for having discounts at office supply stores or airlines.
Consider Rewards Programs Many business credit cards (and corporate cards for that matter), offer rewards programs for using their card. Do you do alot of traveling for your business? It would make sense for you to look into credit cards that offer rewards in the form of airline miles, discounted airfare, travel accident insurance, or car rentals. Do you tend to purchase supplies from a specific vendor on a regular basis? There are rewards programs that earn you points or cash back for purchases made at specific locations, and this makes sense for businesses who make repeat purchases from that location. Why not be rewarded for spending you have to do anyway?
Pick a Card, NOT Any Card Choosing a credit card for business use is not a decision to take lightly, as the card will be a major factor in the amount of money you spend for your purchases, the ease in which you can track your business expenses, and the potential for earning free items or cash back.
