Frequent changes in the economic condition of the world are affecting the growth of small businesses badly. Small business owners are searching for financial helps and financial institutions or banks are not in the position to lend their help without any heavy return.
To solve this financial problem of small businesses, government and financial institutions came up with a solution to provide short term loan to them in the form of small business credit cards. Although these credit cards will act as fixtures in the business financial reports, but the issuers have to be very careful while selecting a right credit card.
Many small business owners are relying on business or personal credit cards to run their business operations. The high interest rates attached to these cards discourage owners to accept them, but then sometimes they do not have any other option available.
To get these cards you need to have good credit history and score. Credit history is evaluated by looking into the past records of your financial transactions and the flow of payments made in previous creditcard.
Selection of Right Small Business Credit Card:
Small business owners should keep several points in their mind while selecting a right credit card. Three of them are given below:
- Annual fees
- Interest rates
Annual Fees for Business Credit Card:
Annual fee is kind of money banks charge for issuing and providing their credit cards services to their customers till the time they avail it. It is an additional charge bared by the customer, thus one should compare the annual fees of different credit cards to make wise decision.
Interest Rates for Business Credit Card:
Before applying for a business credit card from a specific financial institution or bank, it is important to compare the interest rates of credit cards offered by other banks under the same category. Somecard issuers went through the pain of bad dealings that resulted in costing 50% of the extra amount as compare to amount charged in regular creditcard dealings. Interest rates increase the cost of transactions to a certain level and if not compared wisely it could lend up creating bad debt for your business.
Small Business Credit Cards Rewards:
Calculate your credit score before applying for any of business credit card. The score will help you in knowing the cards you are eligible for and from them you can select the best card, which has low annual fees and great reward. Though the rewards on cards could vary on the basis of terms and conditions and the background of the person or company it is applied for. But, it is important to know the rewards before, as sometimes they are given in the form of cash or discounts on travel and merchandise.
Tips to Follow Ffter Availing a Business Credit Card:
- After selecting the right business credit card, make a plan that you will use this card for business purpose only. Using business credit card for both personal and business purposes create taxation problems.
- Make a habit of maintaining each and every company record including all credit card transactions with statement for tax purposes. The record book is evaluated at the end of the year to know the financial status of the business.