Posts Tagged ‘business credit cards’

5 Basic Things You Must Know About Business Credit Cards

Those who run small businesses often apply for business credit cards. Having a credit card account plays an important role for a small-sized business. If you are also considering such an option to finance your company, there are a few basic things that you must be well aware of. Following is a brief rundown on the five most fundamental things regarding it.

The Rates Offered To You Depend On Your Credit Score

If you have a poor or bad credit score, it will be very difficult (almost impossible) for you to qualify for low rates. On the other hand, having a good FICO score will open the doors for the best deals and lowest possible interest rates. Therefore, before you apply for business credit cards, you must first review your credit report. Check all the entries to find out if all the information provided out there is accurate and complete. If not, you must take necessary actions (such as filing dispute with the credit bureaus) to errors fixed. If your credit records are accurate but your score is not up to the mark, you are advised to consider applying for secured cards for businesses. For this, however, you will need a decent amount of cash to be deposited with the credit card company. The amount you deposit will become the maximum spending limit on your credit card. The best thing about secured cards is that they do not require you to have a great FICO score. You can easily qualify for low rates on these cards even if you have bad credit.

The Rules And Policies Differ From One Company To Another

It is also very important for you to keep in mind that different credit card companies may have different rules and policies regarding business credit cards. Therefore, you must read the fine prints thoroughly before you sign it. You should pay special attention to the provisions regarding rates and fees. If you have some confusion, do not hesitate to ask for a clarification, and the clarification must be in writing. Make sure that that there are no hidden clauses and that the company is not charging unreasonable rates and penalties.

There Are Different Types Of Credit Cards To Choose From

You must also be very careful with your selection of the right type of credit card. You need a card that compliments your needs related to your small business. For example, you may like to consider applying for those business credit cards that can simply certain tasks, such as building business credit, accessing your account, and monitoring your expenses. Rewards offered on these cards can be very attractive, but if you are considering a card with rewards, make sure that the kind of rewards on offer match your spending style or requirements.

Introductory Offers Are Temporary

Many companies try to attract customers by offering lucrative introductory offers, such as low rates with a start (*) sign. Make sure you know what this start sign really means. In most cases, the introductory offers are temporary, which means you get certain benefits for a very short period of time initially. For example, you may be offered a very low rate or zero percent interest for the first month and the rates may rise substantially after the introductory period ends. Therefore, you must review the terms thoroughly to find out what is there in store for you after the time limit for the introductory offers expire. A card that charges you a substantially very high rate of regular interest obviously does not make a good choice for you.

It Is Up To You To Use The Card For Your Benefit

No matter how attractive the offers are with business credit cards, whether it is going to benefit your small business or not is entirely up to you. You will have to use it wisely and keep a control on your spending habit. Besides that, the most important thing is that you must pay off the balances in full every month. Many people try to avoid the actual credit card debt by just making the minimum monthly payments, which is not a wise thing to do because credit card debts pile up very fast, and before you realize it, things may just go out of your control. therefore, you have to be very careful with how use the cards.

When you pay off the monthly balances on your business credit cards in a timely manner, it also helps in boosting the credit worthiness of your small business.


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