Top Things To Keep in Mind When Considering a Business Credit Card
When chosen wisely, the right credit card can be a great partner, saving you and your business time and money. Banks and credit card issuers have been expanding their offerings to small businesses in the recent years, but with dozens of options available, choosing the one that best suits the needs of your enterprise can be somewhat confusing. With any credit card decision, there are some factors to consider.
Monthly Payoff or Over-time Balance? A credit card or a charge card?
The method you choose to employ to pay off your credit card bills greatly influences the choice you make when picking a credit card itself for your small business. Do you plan to pay full charges at the end of each month, or pay them off over time? If it’s over time, a business credit card, similar to a personal credit card, allows you to pay your dues over time while carrying a balance into the next cycle. If that is the case, then you need to consider the annual percentage rate. A credit card with the lowest APR or teaser rate of zero percent might be the best option for you. But beware that in many cases these rates can climb significantly higher after a certain period. If you plan on paying the full charge on a monthly basis a charge card with longer grace periods for payment might be more appropriate, but this option is more suited to an established business rather than a strapped for cash young venture.
Many credit card companies are offering reward programs, from cash back to reward points that may be exchanged for merchandise purchase to air travel points or miles. Pick a card that is most beneficial for you. If your business requires frequent air travel, then choose the one that offers the most points. If travel isn’t a big priority, then consider one with cash back. When comparing the rewards programs, you should always read the fine print. Know the ins and outs of what the card offers you so that you may be able to utilize the benefits to the max.
Fees and Costs
Perhaps the most important factor to take into consideration while in the market for a business credit card is the annual fees or costs of maintaining that credit card. Most cards that offer any sort of reward may have an annual fee, paying which is only sensible if the particular benefit is worth more than the fee itself. While business cards have some of the lowest interest rates offered these rates may be subject to change after a while.
Be sure to weigh in all the pros vs. the cons before settling on a business credit card for your company. Only after careful consideration of all the aspects deems one card better suited to your needs over another.