Business owners normally receive a lot of applications and offers for a business credit card. People mostly wonder about getting one or how they are different from other means of credit. A good business credit card is important to developing a new business. It helps a business owners to trace their monthly expenses, but it also gives the needed purchasing power while making sure that you are covered in case of some financial emergency that may occur. A business credit card is a easy way to having a quick access on financing for some short-term and increases a company’s power for purchasing. But still, like most of the other sources for financing, it also comes at a cost and needs to be thoroughly managed.
Business credit cards give business owners easy admission to a revolving line of credit that has a set credit limit, for them to be able to make purchases and withdraw money. Same with a consumer credit card, a business credit card bears an interest charge if the balance is not paid back fully in each billing cycle. People can get a credit card through a bank or you can view the comparison of card’s features and terms. Having a business card is important, however, not all credit cards are done equal. Let us take a look at what you need to consider when choosing a business credit card.
Charge Cards vs. Business Credit Cards
Even though a lot of people use the terms identically, a business credit card is in fact, different from a charge card. Credit cards allow the owner to hold a balance, while charge cards requires the owner to pay off the complete balance needed each time of payment. A charge card is a good option if you want to avoid accumulating debt and for saving on interest costs. While a credit card sets a bound on the price you can spend every month and credit cards are less likely to require annual fees.
An annual fee is charged by some business credit card issuers in addition to the payment from the interest on all of your purchases. While it is common to be fascinated to credit cards that does not have annual fees, you should try to remember that some cards with payments may offer better rewards. A lot of no-fee cards come with larger interest-rates that can damage you if you fail to pay off the balance for every month.
Annual Percentage Rate refers to the amount of interest that you additionally pay to the price of your acquisitions if you failed to pay off the whole balance. A lot of business credit cards proposes low introductory-rate APRs, the ratings can easily rise steeply right after the initial term. Business that only make minimum payments every month are more likely to end up having to pay a lot more than the advertised APR, and they will also have to pay interest on recent interest from the past months.
Be sure to be able to factor in all the payments and interests compounded to get the most precise number when you are calculating APR.
A lot of business cards propose rewards that are bases on points which can be applied toward common business payments such as gas, air travel, restaurant, etc. Some also proposes cash back on several purchases in specific categories. Reward cards are a fascinating way for cutting costs; however, in most of the time, they feature larger APRs than small or regular business credit cards. Apparently, rewards card is a lot more likely to have annual fees than other normal business credit cards. Reward cards can prove as a better option if you are planning in paying our monthly balance regularly and its possible rewards may outweigh the annual fees.
Business credit cards enable you to easily track expenses and handle with unexpected prices while making companies to stand up fascinating rewards. But with the wrong card, it is easy to be racked up in debt as well. Also, you should always remember that protecting your company or business and client’s financial data is important for preventing any kinds of disaster that could destroy your business’ goals and dreams. Here are some tips you should remember in taking care of your business
Secure Important Files Online/Offline
From tax return fillings to customer lists to bank statements, every business have a number of electronic and paper files that holds sensitive information.
Launch Good Internal Controls
Security is one of the most needed in n businesses. Passwords and restrictions on certain files to employees must be applied.
Survey About Information Practices
Ask other vendors or companies you know about their security practices.
Prevent Device-Centered Hacking
Employees using their own device or mobile phone might be a little risky.
Generally speaking, every credit card has its own advantages and disadvantages. You just have to determine which of the features fits you more and you where would be more comfortable. Having a business credit card boosts a company but it still depends on how the owner will manage it.