Business Credit Cards: Choosing the Best Card for Your Business

For the investment-conscious individual, the best way to generate income is to put up a business. With the rise of small to medium sized businesses in the market along comes the rise of various business credit cards that offer financial assistance.  

Why are entrepreneurs turning to business credit cards?

The economic crisis in the United States and in several parts of the world has led to a decrease in lenders that once cater to small to medium sized businesses. Now that their funding well has dried up, entrepreneur borrowers are becoming more and more reliant on business credit cards.

However, since credit card companies are still essentially “lending” companies, it could be harder to be approved of a business credit card unless one is already an existing personal credit card holder, and has been in good credit standing with them ever since. 

Generally, if one has been able to maintain regular payments with one’s personal credit card, it may be easier to apply for a business card with the same company.

What are factors to consider in choosing from among several business credit cards?

Because the business operations will be financed with the card, choosing the best one from several business credit cards must be done smartly and carefully. Generally, there are three factors to consider. 

First, consider interest rates. This is the most important criteria to look into when shopping for business credit cards. Be sure to inquire about the company’s interest rate policies, as some can have an (unlimited) increase to up to 50%, which is discouraging, especially, if the card is meant to fund a startup business. Go for business credit cards which have a fixed rate increase.

Always remember that credit card companies earn through interest rates, so a way to maximize your business credit cards without hurting your finances is to pay off your balance every month.

Lastly, look into the rewards programs that business credit cards have to offer. In reality, this is also another way to bring balance to your financial world – painful high interest rates and annual fees can be lessened when good rewards compensate. Choose a credit card company with a robust rewards incentives program.

How do I protect my business credit cards?  

Thanks to President Obama’s Credit Card Accountability Responsibility and Disclosure Act. This legislation aims to protect consumers from unjust and deceptive credit card fees and practices of issues.

However, this law only applies to personal credit cards. A good way to get protected by the law is to sign up for a personal credit card which you can use to finance your business.

If you think business credit cards are for you, any unjust act by your issuer that calls for legal action can still be reported to FTC, or Federal Trade Commission.

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