The Truth About Business Credit Cards
May 7, 2011 # 7:03 am # Business Plans & Financing # No CommentThe Truth About Business Credit Cards
Article by Pamela Williams
Do you own a business? Or still in the planning stage to start-up your own? Then a business credit card may just be the thing for you. A business credit card is the modified version of your personal credit card and a lot more.
The Benefits Of Business Credit Cards
First of all, it separates your personal money from your business funds. It gives you the option to distribute business credit cards to your employees to keep track and control spending on all your business purchases. It also provides you with an annual report, detailing all purchases that are made on your account. This is a great help when reviewing your accounting and tax payments. More importantly, a business credit card can be used to temporarily fund a business and get it started without waiting for a bulk of cash to come in hand.
The Types Of Business Credit Cards
The business credit cards give rewards to their customers which surely benefits small business owners and entrepreneurs. Rewards come in the form of cash rebates, discounts on purchases and free travels in and out of the country. Because businesses use their credit cards for big purchases, they gain more points easily which entitle them to great rewards and bonuses.
Most business credit cards offer big discounts for the whole promotional period to attract more customers. Most credit cards allow a very low charge on the APR which can last from 3 months to a year, to even more than one year period. The rate varies starting at a 0% interest rate. If you can get credit with a 0% APR, then you can actually get a very big purchase without having to pay for it in cash instantly.
Making the most of the Introductory RateSome best business credit cards will also give you a very low interest rate on purchases during this period. This is a good time to make all those expensive purchases your business needs.
Another great deal with many business credit cards is the 0% balance transfer rates for a certain time period. Combine that with a low APR, and it is an ideal way of paying off debts more quickly, by transferring your credit from another account to this credit card. Thus, you get rid of excess charges on interest and you can focus on paying off just your original debt. Always keep in mind the date that your introductory rate ends, and budget accordingly.
You would want to watch out for any hidden traps though. Some credit card companies would ask for higher fees on other charges such as higher annual fees, higher balance transfer fees, high penalty fees, etc. Also, check if the APR will still be a reasonable amount once the introductory period is done.
In case you are getting the card solely for its low initial offer, then you should even be more careful. Remember, in order to keep that rate low for the whole introductory period, you need to prove that you are being a good payer or else this privilege could be taken away and you could find yourself stuck with a much higher rate.
There are others who use the strategy of switching cards in order to pay of their debts more quickly minus the interest fees. The only thing you would need to be cautious about is being able to pay your bills promptly. However switching accounts too often may reflect poorly on your credit report, if you are opening brand new lines of credit each time. Once your rate ends, call the credit card company and see if they have another low interest rate available. In my experience they will either give it to you right away, or if not, just mention you will simply transfer the balance to another card. Many times they will “find” you a new rate for you. So, if you have already found a card with a low rate even after the introductory period, it is a good choice to stick with it. It saves you from more hassle so you can concentrate on paying your bills and maintaining a good credit record.
Certainly business credit cards are a convenient way to handle your business resources. A vital point to bear in mind always is that managing your finances requires self-discipline and a proper view of money. Using your business credit card to its full potential is up to you. Take advantage of all your privileges but never abuse them.
About the Author
Pamela Williams is a Loan Consultant, Internet Marketer, Writer and owner of BusinessCreditCardSite.com, a finance company Las Vegas Nevada providing support for businesses all across the US particularly with obtaining business credit cards. Visit http://www.BusinessCreditCardSite.com
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