Category Archives: Business Credit Cards

Why Using A Credit Card For New Business Is The Smart Way To Go

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If you are starting a new business, you may be considering applying for a business credit card. Many companies do offer a credit card for new businesses. Some entrepreneurs are weary of using them. Though it is true that credit cards can create a plethora of problems, if managed properly they can be a wonderful thing to have; especially when you are starting a new small business.

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The advantages of a credit card for new business

There are many advantages to using a business credit card, and when properly managed it can save you a lot of headaches.

Benefit One: Ease of itemization

Your expenditures can be tracked more easily especially because most companies will send you an end- of-the-year summary showing you all transactions in a list that is categorized and itemized. This means that your bookkeeping will be virtually done for you! Furthermore, some credit card companies provide their business customers with the option of downloading e-summaries. These could truly streamline your accounting and bookkeeping process without any additional effort or expenditure.

Benefit Two: No cross mingling

It is always a bad idea to mix business with pleasure, so keep your personal and your business accounts separate or risk running into problems with management and/or taxes. A busy entrepreneur could attest

Benefit Three: Rewards

Spurred by competition, credit card companies sometimes turn their efforts at gaining market share into special rewards wars. Depending on the card you choose, you can get discounts on anything from travel to Internet services.

Benefit Four: Spending Management

With a credit card designed exclusively for business, you can allow your employees to have a card for work use only. With employee cards you can set the spending limits just for some extra peace of mind. You can also go online and monitor the spending habits of all card holders to ensure things are going along as they should.

Benefit Five: Raising Your business credit

Having a credit card just for your small business can help you build up credit for your business. This will help out a lot in the future if you need more credit or loans.

Steps towards effective management of business credit cards

Like all financial tools, a credit card for a new business must be managed responsibly. This may take some time to for a new business owner, but all in all it is fairly simple if you stick to a good plan.

When you do decide on the right credit card for your new business you will likely find that you have a grace period of 21 days before making a payment on the card. This is a great way to help improve upon your cash flow. Using your card as opposed to checks allows for faster clearing. Finally, stay away from unnecessary debts and keep all your bills paid on time — all the time. Sometimes, basic steps are the ones that are ignored most often.

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How To Get A Business Credit Card For New Business

By Matt

Starting a new business can be one of the most exciting and stressful tasks you will undertake in your life. You could be giving up the comfort and security of a regular paycheck on an endeavor that poses risk, challenge and years of hard work. On the flip side, you get the opportunity to be your own boss, to put your ideas into action and claim all the credit when you succeed.

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Often, new business owners can underestimate the amount of red tape, expense and headaches involved in setting up a new company. You might start to appreciate what your old boss was going through when he was in one of his moods. At times, it seems like every hurdle cleared leads to the next unexpected obstacle. Credit is a common stumbling block for small businesses. Cash flow is sluggish but expenses remain constant. Access to a credit card could help ease the transition to profitability, but you have no track record and low revenue; most banks wouldn’t touch you with a ten foot pole. Does your business really need a credit card? How can you get a credit card for a new business?

How credit can benefit your business

In a new business that is just starting to get its feet on the ground it can be hard to keep up with all the expenses. Modern equipment, rent, advertising to get the word out, not to mention employee salaries; the bills seem endless. You probably aren’t paying yourself a salary and the money you saved up is almost gone. A business credit card can help ease some of the financial burdens and build your business:

  • Individual bills can be paid with the credit card. In a form of debt consolidation, use your credit card to pay bills as they come due. You want to keep your suppliers happy.  Organize your finances so that you pay your monthly card balance when it is convenient for your business.
  • Keep track of costs and keep an eye on spending with a credit card.
  • It gets the ball rolling on your company’s credit history. Building a positive credit score for your business can be a huge factor down the road when you are looking to finance an expansion, or invest in new equipment.

Will my new business be approved for credit?

That depends on how new your business is and your monthly revenues. Most credit card issuers require a business to have a good track record for several years and annual revenues in the millions to be considered a candidate for a corporate card. But that doesn’t mean your hands are completely tied.

Your new venture will qualify for a small business credit card if you, as the owner, are willing to co-sign for personal liability. This means that if the business can’t pay the bills, the credit issuer can come after you personally. It also means your credit score will be verified and used to determine how much credit the business will get and how expensive it will be. Once your business is more established it can apply for its own credit card, and you can remove your personal liability.

Remember when starting a new business to expect the unexpected. Always over-estimate expenditures and you will find yourself swimming more often than sinking.

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How To Find The Best Credit Cards To Have For Business Owners?

Different kinds of people use credit cards each day. But the needs that people are looking to be met by credit cards hugely depend upon their financial and of course credit status. For example, students may be looking for a different set of needs with credit cards while business owners may be looking for a totally different set of needs.

What are the best credit cards to have for business owners?

As a business owner, you have a lot more requirements from your credit card than the run of the mill needs like getting credit, getting rewards or cash back or earning access to concerts or operas.  Choosing the best credit cards to have for business will be based on these needs and how the cards propose to meet them.

Business owners and their various needs

You may be expecting your credit card to support you when you want to fund your business needs like buying materials, stocks, or software. So obviously you are interested in those credit card companies that are prepared to extend a higher credit limit to you.

You may also be interested in cutting back your travel expenses if your business requires you to travel by air many times in a year for client meetings or business expansion.

Other needs that you may have as a business owner might include gas discounts, if you have to travel by car in relation to your business. Business often involves meeting clients/interested partners/investors over dinner or lunch. So you could also be looking forward to earning free or discounted entry to expensive restaurants or diners, in order to save a bit of cash on your frequent meetings.

How to find the best credit cards to have for business owners?

Before you can find the best credit cards to have for business owners, you will have to sit down and list your needs. Once this is done, you may want to prioritize some of the most important ones. After this is done, choosing the best credit cards to have for business is a walk in the park. You simply need to match the credit card features with your priorities and go with the one that matches best.

Which banks provide the best credit cards

This is not an easy question to answer, because almost all the big banks and popular credit card companies have some great options when it comes to credit cards specifically targeted at business owners. You can compare the top ten offers from the different credit companies and banks and then find one that suits your needs.

As a business owner, your credit card needs are not like those of individual users. You should know that banks and credit card companies have great offers for business owners like you. Do not try to adjust with a regular credit card that you may already be having. Instead, look for the best credit cards to have for business owners.

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Five Exclusive Benefits Of Good Business Credit Cards

The current financial market has emerged into an innovative era for business credit. Now, most business owners possess business credit cards exclusively for company use. With the budding popularity of business credit cards, it is vital to be fully aware of the advantages of having one so you can fully maximize your business credit cards. Here are some of the good business credit cards benefits you can take advantage of.

Steer clear of mixing business with pleasure

Intermingling your business and personal credit card transactions can create serious financial risks, detrimental not only to your business but also to your personal credit. With good business credit cards at your disposal, you can easily evade problems and prove to the IRS and other concerned entities or individuals that you are serious about your business.

Easily track business expenditures

Monitoring and evaluating your business expenditures can be very challenging for business owners. However, if you have good business credit cards, you can easily itemize and categorize all credit transactions made through the business credit card because you will receive a year-end statement summary in addition to monthly statement of accounts. With this, you will never have to worry about collecting receipts (in a shoe box as most people do) every time and going through them one at a time, thus, making bookkeeping seamless and hassle-free.

Develop business credit

Good business credit cards grant freshly-established businesses a great opportunity to build business credit from ground up. In our current financial environment, this will prove to be a necessity as financial opportunities for businesses take into consideration the company’s credit status. This is particularly true if you need working capital (in the form of credit cards or loans) to expand your business and make it more profitable.

Employee expenditure management made simple

When you have good business credit cards, your employees may also have their own credit cards under your business credit account (as sub-accounts). You can determine the credit limit for each employee or you can authorize the card issuer to evaluate the payment capabilities of each employee based on their income. You will also receive separate statements for each card bestowed to them so you can carefully monitor their spending habits and payment performance.

Aside from the useful benefits stated above, good business credit cards also hold incredible benefits exclusively for business cardholders. These rewards can be in the form of discounts, travel rewards, and various business-related goods and services. Take advantage of using the credit card to lower your expenses.

Good business credit cards, like other types of credit cards, are great financial instruments. The only difference is that not only does it help you financially but also strengthens your business. However, if you have credit cards, including those used for business, you should utilize them responsibly and cautiously, as its misuse can create problems of immense magnitude.

Small Business Credit Application: Useful Facts And Tips

Having a business of your own is rewarding but there are times when you need an extra boost, especially with the funds. This is where business credit cards come into play. It is easy for large business owners to obtain and maintain such credit cards but the smaller ones often encounter difficulties especially during the application process. However, card issuers have now made small business credit applications easier to help start-ups secure routine working capital and a potent transactional tool. This truly is tempting but before you take any action regarding this, be aware of the following ways a business credit card differs from your personal card.

Issuing companies reserve the right to increase rates

Small business credit cards are very different from personal credit cards especially in terms of governing rules for cardholder protection. So before you venture into a small business credit application, you must understand that the laws applicable to your personal credit do not apply to your business credit card. For instance, the 2009 Credit Card Accountability, Responsibility, and Disclosure Act may not apply to your business credit card in certain instances. The issuing company may increase rates should it choose to do so, subject, however, to other regulations.

On the bright side, most card issuers have adopted the protections provided by such law so if you want the same rules that apply to your credit card, choose your business credit card company wisely.

Exclusive rewards and benefits

Like your personal credit card, business credit cards have key benefits as well. Some are similar to those offered to individuals but others are exclusively for companies. Such business benefits include baggage insurance when travelling, expense tracking, and access to airline and hotel clubs and exclusive lounges. So if you find a reward type particularly useful for your business and your employees, then make sure to opt-in for it while completing your small business credit application.

Distinct credit requirement

Card issuers usually issue business cards directly to the owners. As such, the business owner should meet the established credit requirements so the company may qualify for a business credit card. As far as the small business credit card application is concerned, either the owner or a senior-level officer offers a personal guarantee. Aside from that, any negative credit behaviour incurred using the business credit card reflects on both the owner’s personal credit and the company’s credit. So when in the process of a small business credit application, ensure that business credit accounts will remain in good standing. Otherwise, you risk jeopardizing both your personal and business credit.

Small business credit cards are great for establishing business credit, earning different kinds of rewards, and boosting business finances. However, you should always be cautious about your spending habits so you do not damage your personal financial status. Remember, that the purpose of your small business credit application is to help you grow financially, not to encourage improper spending habits.

Why You Should Have Separate Personal And Business Credit Cards

A measurable percentage of small business owners continue using their personal credit cards for business related transactions. While there is nothing inherently wrong with the practice of using personal credit cards for business purposes, there are some distinct disadvantages that could cost a business dearly, in terms of both time and money. Separate personal and business credit cards could mitigate these unnecessary costs and save you a lot of headaches in terms of organization and categorization.

Here are some reasons why you should have separate personal and business credit cards:

Business credit cards offer streamlined reporting and expense categorization

If you use your personal credit card for individual and business purposes, categorizing and separating expenses every month could cause headaches, not to mention wasted time. Errors could easily creep in, resulting in fewer deduction claims and increased taxes. If you add the opportunity cost for the time taken to handle the overall process, the costs could be very high even if handled by a minimum wage employee.

A business credit card can not only make this process easy, you can actually take advantage of the convenience of automated categorization and reporting offered by many small business credit card companies. Some business credit cards will automatically mail you an annual statement with an aggregated summary of your expenses (and categories). Some would even allow you to download this summary to your favorite spreadsheet or accounting program.

Dedicated customer support and lesser wait time for business credit cards

Dedicated specialists are specially allocated to support business customers. This could mean potentially faster access to support and a higher level of extremely knowledgeable support. The number of business credit card users tends to be lower in comparison to personal credit users, so the wait time on your calls could be significantly less.

Business credit cards offer pre-negotiated discounts and deals, perkier credit lines

Given the mass of customers, business credit cards often negotiate special deals and savings for business customers. These could range from savings on office supplies to travel rewards and special business discounts and deals. Furthermore, the credit line tends to be higher as well.

Access to networking opportunities and business resources

In contrast to personal credit cards, business credit cards leverage a vast pool of resources, facilitate networking with other business owners, provide several business resources, and help business owners take advantage of a large number of community resources.

Longer promotional periods

If you have ever come across a 0% APR credit card offer, you know that the offer is restricted to a specific duration, after which the regular APR is triggered (often a much high number). While personal credit cards could have a promotional period of six months to eighteen months, business credit cards have relatively longer introductory periods — though not always.

Despite these advantages, some business credit cards may have higher APRs after the promotional period and also specific business-related fees. Always read the fine print and make sure you understand the terms clearly.