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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.
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