Choosing and Reaping the Benefits of Business Credit Cards
Posted by fybmanager20 at July 13th, 2012
Business credit cards are great for start-ups and existing businesses alike. Studies reveal that a large number of business owners are relying on bank and financial services financing due to limited capital. Businesses that do not have the financial resources to operate will be able to infuse necessary funding through the business credit card. The credit card is based on the credit score of the business. There is no collateral needed to be able to access the funds.
Factors to Consider in Choosing Business Credit Cards
1. Interest rates. It is important to make comparison shopping before choosing a business credit card to ensure that you get the least interest rate. The lesser the interest, the more money you can use for the business. Business credit cards with high interest rates may cause
2. Minimum payments required. It is important to make at least the minimum payments per month to maintain good credit record. It is easy to meet the minimum payment requirements of business credit cards if they are low. This also enables the owner to use the more money for business operations.
3. Credit limit. The credit limit of the credit card must meet the business’ financing needs. It must be able to cover fixed monthly expenses such as electricity bills, water and labor expenses.
Benefits of Getting Business Credit Cards
There are numerous benefits of getting business credit cards including the following:
1. Quick Access to Funds. This is probably the most primary benefit of having a business credit card. When a business runs on a limited budget and it is low on cash, using business credit card is the next best move. This ensures that the business continues operation even before income is realized.
2. Build Solid Business Credit. A well-paying business owner will be able to build a credible credit reputation long term. A good credit score in his business enables him to access more financing options.
3. Keep Track of Employees Expenditures. Employees are able to pay for business expenses without having to file for cash request. They also do not need to keep a record of receipt for every business transaction they go into in behalf of the company. Business owners are also able to determine quickly if the expense is valid by checking online credit card records.
4. Great Rewards Program. Rewards for use of business credit cards can come in many forms such as points per dollar spend, cash backs, redeemable points, travel rewards and many other benefits.
5. Accurate Accounting. The business owner receives monthly billings at the same time an annual summary report. The detailed report is necessary when preparing tax claims. It will be easier to determine which expenses are tax deductible and business-related and which are for personal use.
6. Ability Make Delayed Payments. Expenses incurred today are not paid right away. Payment is made when credit card bills are due. This enables the company to make purchases even if they do not have ready cash and make payments once they raise funds later.
Dave Thompson writes for Businesscreditcards.com and is open to writing on a freelance basis about anything related to his industry.