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THE PLAIN TRUTH ABOUT SMALL BUSINESS CREDIT CARDS
A series of professionally written articles and advice that enables education and a better way to compare and apply for the Business Credit Card that's right for you. Whether you are a top executive of a Fortune 500 company or a new small business owner working toward your dream, the world is your oyster and you'll soon have all the tools you need to crack it.
Start it up
Starting your dream business can be a daunting task, but it doesn't have to be. With a business credit card, it becomes much easier to finance your business startup while also lessening the financial risk you would experience if paying for everything out of pocket.
Diverse Options for Diverse Opportunities
What's more, most if not all credit card issuers offer different products for different entrepreneurial needs, many with specific benefits and financing incentives included. For example, some business credit cards may be best suited for large corporations with hundreds, or even thousands of employees, some of which may carry expense accounts in the company's name. A business credit card account designed especially for large businesses allows the employer to track all expenditures incurred by his or her subordinates who use business credit cards tied into the corporate account. These accounts also keep tabs on the company's overall spending. Likewise, a small business credit card may be the perfect fit for someone who is launching a new business from home or within a small office environment.
Easy Advantages of Small Business Credit Cards
Whether it is just you or a few additional employees as well, a small business credit card provides a fairly flexible line of credit to get your business off the ground. In other words, rather than saving up money for business startup, savvy businesspeople can achieve the same end result a lot sooner by leveraging business credit cards for that much-needed startup capital. From office supplies and equipment to organization membership dues, legal fees and more, a small business credit card can easily become the integral link between your startup business dream and reality.
Once your small business becomes profitable, you can use your newly earned revenue to pay off your business credit card balance, thus avoiding any hefty interest charges. In addition to easing the foundation stages in your business startup, small business credit cards provide a wealth of financial benefits. From convenient 0% introductory periods to cash back, rewards, hotel stays, and airline miles, these credit cards have your best interests as a business professional in mind. With a good record of responsible behavior in paying minimum payments on time, business owners may enjoy higher lines of credit if no-preset spending limits are imposed. Furthermore, these cards offer meticulous expense tracking, and often, the ability to download credit card statements into software programs for complete analysis and future planning.
Business credit cards make the dream of owning your own business a reality. It's much faster and easier and sometimes more economical to get started with a new business card rather than hassling and waiting for loan approvals from your bank or lender. With small business credit cards, your financial future is in your hands.
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SMALL BUSINESS CREDIT CARDS: PROS, CONS, AND TIPS FOR USING THEM
Although it is not a prerequisite to carry a business credit card as you prepare for business startup and success, the value of such a card becomes apparent with its first use.
Pros
When money is tight and the dream of starting your own business begins to slip away, remember that it is always within your power to make things happen. Perhaps one of the greatest things about small business credit cards is that they equip the cardholder with a flexible line of spending, even when times are tough. Even when you find yourself without the necessary cash to pay for your monthly business expenses, these credit cards can really save the day.
Pros of small business credit cards include:
• The ability to purchase when cash is tight or temporarily unavailable
• The ability to track expenses and to keep thorough records with or without specific financial software
• Less of a burden, come tax time
• A variety of rewards, cash back, airline miles, hotel stays and other incentives
• The opportunity to build a good credit score for your business
The Flip Side
By this point, business credit cards may seem like the answer to your prayers, and quite possibly, they are. But, for the sake of business posterity, take the time to familiarize yourself with all the terms and conditions of the credit card agreement, and how it differs in behavior from your personal credit card accounts.
Be Aware of the following facts:
• With a business credit card, your personal and professional finances fall under the same umbrella for the first several years of business operation, at least. Once you establish a credit history for your business, your personal credit may then be considered a separate entity.
• Business credit cards carry the same personal liability as traditional credit cards. In other words, if your business fails, you are still responsible to pay back any debts you accrue in the business name. If not, the creditors may come after you for payment.
• Your small business credit cards will also appear on your credit report. This could be a good thing or a bad thing, depending on your financial behavior. Your personal credit score could suffer a severe blow if you allow debt, late payments and other delinquencies to occur on your business accounts.
• Very often business credit cards do not carry as much consumer protection benefits as traditional cards offer. In cases of claims and defenses - if a credit dispute should occur - it is up to the cardholder, not the credit issuer, to resolve the dispute.
Summary
Thanks to the convenience and flexibility of business credit cards, small business startup opportunities become possible with very little or no capital upfront. Rewards, expense tracking and facilitated preparation for tax reporting make small business cards a no-brainer. While several terms and conditions differ between business credit cards and personal credit cards, they don't always impact the cardholder negatively. Read below for tips to boost the financial success of your business.
Small Business Credit Card Tips:
• Because personal and business credit cards get lumped together into your own personal credit report, it is important to practice responsible borrowing behavior to avoid unnecessary late fees, finance charges and bankruptcy.
• If you maintain good personal credit from the start, and carry that same behavior throughout your business startup, the success of your business becomes more of a probability than a possibility.
• Smarter spending and saving practices contribute greatly to the financial outlook of your business.
• Even if your credit history leaves some room for improvement, you can still fund your startup with a small business credit card. Check out secure card options for a chance to build up your credit score.
• Register with all the credit bureaus so they can begin collecting facts and data about your new business. This can help you establish a good credit score sooner rather than later.
• Weigh your business credit card options carefully. You may want to compare introductory and standard interest rates, incentives and rewards, and any applicable penalties before choosing a card for your business.
• Practice smart borrowing behavior to maintain good credit throughout the lifetime of your business. If you plan to hand the business down through your family, also take the time to teach responsible credit behavior.
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BUSINESS BENEFITS BEYOND CASH BACK
As mentioned above, business credit cards reward cardholders with a host of benefits and financial incentives. Professionals who practice responsible credit behavior may have the opportunity to maximize on their business credit card rewards after establishing a positive trend. Furthermore, business credit cards can be just as convenient for the employee as they are for the boss.
The major benefits of small business credit cards include:
• Increase in the likelihood of success in business startup
• Ease in managing and tracking company expenses
• Less burdensome tax reporting
• Rareness of impulsive spending and overspending
• Comprehensive expense reporting
• Ability to download financial reports to software like Quicken
• Ability to monitor and control employee spending
• Ability to consolidate employee expense records into one file or report
• Acquisition of keen insight when it comes to planning for future expenses
• Ease and immediacy of application
We've gathered all of the best business and small business credit cards and listed them here on this site, with applications securely linked to the Bank or Issuer. Simply review the offers on our menu and select the credit card that best suits the needs of your business.
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WHY APPLY FOR A SMALL BUSINESS CREDIT CARD?
While customary credit cards may offer many of the same benefits as business credit cards, like rewards and low introductory APRs, personal credit cards just don't offer the same flexibility that business credit cards do. From selecting the right business credit card for you to actually applying for it, Frankford Financial makes the entire process as easy as possible. After thorough research, we have compiled all the best business credit card offers right here on this site for your convenience.
Extend Cash Flow to Accommodate Monthly Expenses
Corporate cardholders can easily extend their cash flow. By using credit cards to pay for business items and supplies, business owners open up a window of time before the bill is due, leaving greater flexibility in running their businesses. At the bill's due date, cardholders can pay it off, now that they have collected their own income for products sold or services rendered.
Extend Credit Lines for More Flexible Spending
By simply paying their minimum payments on time, cardholders may become eligible for larger lines of credit. Some business credit cards don't carry a preset credit limit, while others do. Credit cards carrying no preset credit limits make it easier to run an inventory-based business seamlessly because the cardholders have free reign to buy everything they need during that timeframe. Credit cards that impose a strict line of credit may constrict a business owner's spending ability, but that does not necessarily mean the business will suffer.
Earn Back Some of What Is Spent
Savvy businesspeople will likely take advantage of business rewards like cash back, hotel stays, air miles and other goodies. In many cases, a business rewards card will offer a certain percentage in cash back or reward dollars on every purchase. Some targeted purchases may even qualify the cardholder to earn back a higher percentage, such as five percent, as opposed to one percent.
Report Expenses in Half the Time
Whether you are the employer who is preparing the expense records for tax time or the employee who is preparing to submit expense sheets, business credit cards can make your task so much simpler. Many times the data gathered through business credit cards is used for expense tracking, tax reporting, planning for future expenses and so forth. In most cases, business credit cards and small business credit cards allow the cardholder to download copies of the financial reports to a software program for better control and management of the information. By maintaining precise records and analyzing various business trends viewable on these reports, business owners can better ensure the success of their businesses.
Summary
So why should you apply for a business credit card account? Simple. If you want to provide your fledgling business with as much flexibility and personal control as possible, it would be a very smart move to make. The benefits gained with a business credit card far outweigh the possible disadvantages, and the risks involved with such an account are all within your own two hands. Practice responsible borrowing behavior. Work to establish a good credit rating, and take the time to review your company's financial records from time to time. A business credit card truly could be the key to the success of your business.
We've compiled a list of the best business and small business credit cards available. Follow the link below to compare and contrast the top offers to determine the best business credit card program or small business credit card program to suit your needs.
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Andrea Stradley, Senior Analyst, Frankford Financial ?2007
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