Small Busines Credit Cards
A small business credit card enables you to separate business expenses from personal expenses and to make business transactions conveniently by phone, via the Internet or in person.
When going in for buying a small business credit card, the first thing that you should consider is determining your business needs. This can be done as follows:
1. Compute the total amount of forwarded credit that your company will need. As a general rule, find out how much your company will spend on a monthly basis and apply for this amount, on the condition that you can pay it off.
2. Determine the number of credit cards your company will require and the number of employees needing the credit cards.
3. Decide whether there is a need for a system helping to keep track of employees' expenses. Some credit card issuer companies offer this type of reporting package in addition to the credit card and allow you to download data to QuickBooks, and so on.
4. Identify the travel and entertainment requirements of your company. Is there a need of a card that enables you to earn miles and gives away special hotel and rental car benefits Is there a requirement of travel accident insurance
5. Search for certain features such as: a low or no annual membership fee, a low interest APR, round the clock customer service, local branch access, merchant acceptance, overdraft protection and account reports customized for your business needs and so on.
After you have determined the business needs, all you have to do is the following:
Apply for cards with banks or financial institutions with which you already have a business. You are more likely to get encouraging rates and credit lines from these banks or lending institutions.
Select the employees who will have cards wisely. This is because the company, and not the employee, will pay the penalties late payments and not meeting the deadlines.
Select a card that is most commonly accepted and earmarks you and your employees to buy everything you need.
Some Don?ts about the small business credit cards
Avoid applying for a small business credit cardif you will be unable to pay off your balance at the end of each month. This can embark a negative impression on your credit history and can do considerable impairment to your personal credit history and can shackle your ability to get credit for your company.
»Provide the credit cards only to employees you can bank up on and to those who really need the cards.
»Keep a note of teaser rates. These low rates are often initial offers and can soon come close to 20 %.
»Do not use your credit cards for cash - the transaction fees can be high and interest begins falling immediately.
»Next step is to determine the type of credit card your company needs.
»Buy a corporate card for a large corporation that is one with 100 or more employees.
»Buy a business card for a smaller business.
» Purchase a credit card if you make iterative purchases of certain items, such as office equipments and stationary. The card can lesson the unnecessary paperwork. You can use the account with just an account number, not a credit card itself.
Next Step is to Apply for the Credit card:
»Select a bank or other financial institution. Some of the popular credit cards such as Visa and MasterCard give you the links to cooperating banks on their Web sites.
» Contact the credit card issuing company or bank you select and request an application, or accomplish the application online.
» Specify your name, address, phone number, Social Security number, personal and business credit history, annual income and data on the profitability of the company.
» Render your application. Most financial institutions or banks will complete the credit card processing within 10 business days.
Some useful tips for application of credit card:
» It is often accommodative to use existing banking relationships as purchase when applying for a business card.
» It is easier to get a card if your company has been in existence for 2 to 3 years, is profitable and has a good credit history.
» The largest credit card issuing companies are Visa, MasterCard and American Express. For travel and entertainment expenses Diner's Club is only used. American Express offers a card with no finance fees, provided you do not carry forward the balance. The card does not entail any preset spending limit.
Advantages of Small Business credit cards
Avoid Uniting: If you mix your personal and business transactions you can get a potential tax and money management problems. Thus, if you use the small business credit card for business, you can create an impression in the eyes of IRS and everyone else that you are serious about the business.
Depict Easy Listing: At the end of the year, it might be very cumbersome to track your business expenditures. All the credit card companies will enable you to have a year-end statement summary with the transactions recorded and itemized and categorized. You do not need to worry about the box full of receipts. You just need to organize your bookkeeping process with the small business credit card.
Demonstrate Business Credit: A small business credit cardprovides a newly established business the option to establish business credit. This can prove to be very fruitful if your business grows and you require capital in the form of credit lines or loans.
Provide Amazing Rewards: As in the line of other credit card companies, the small business credit card offers various rewards and discount programs for small business users. Discounts and rewards range from various office equipments to travel related software and phone services. You can take advantage of the small business credit card to lower your expenses.
Supervise Employee Spending: Another advantage of your small business credit card is that it provides the ability to provide credit cards for your employees with a preset limit. Just pay attention to their spending on separate statements you get.
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