Business credit cards provide a way for business owners to keep track of business expenses, to closely monitor and keep expenses confined to one account which will make bookkeeping a lot more manageable and to earn rewards that will save the business a lot of money in the long run. In order for business credit cards to really be a blessing the card must be managed wisely. This means that payments must be made on time and the balance should be ideally kept as low as possible in order to avoid high interest charges. Before you choose a credit card program for your business you need to consider several things. These include the program terms, the benefits and the rewards, the sign on bonuses and the general fit of the card for your business needs.
Below are some details about the different types of business credit cards.
No Annual Fee Credit Cards
If you plan to use the card only in case of emergencies or plan to pay off your balance every month then a no annual fee business credit card will be a good fit for your business. This way you won’t have to pay a yearly fee just for the convenience of having your credit card on hand for those times when you need one.
Some business owners keep a credit card just to build up their business credit and so a no annual fee credit card is also good in this case. If you do decide to start using your no annual fee credit card more frequently you might want to pay off the balance monthly since no annual fee credit cards include high interest rates. Please beware that some providers advertise their cards as no annual fee cards but this may only be for a limited period or there might be conditions applied to the no annual fees so check the terms carefully before you commit.
Low Interest Rate Credit Cards
If you plan to carry a balance on your business credit card then you will need to search for low interest rate offers. Try to get the lowest rates possible and beware of low interest rate introductory offers since you may be better off in the long run getting a low interest rate that will stay fixed (more or less) for the duration of the card.
Even a 1% reduction from one program to another can make a huge difference over time and will save you a lot of money in the long run. Low interest rate business credit cards will give you some sort of peace of mind when you make purchases for business since you will not need to worry about paying excessively high interest charges.
Rewards Credit Cards
If you can make a commitment to pay off your credit card balance monthly and stick to it and plan to make a lot of business purchases using your business credit card then a reward credit card will be the ideal solution for your business.
With reward programs you will accumulate points just for using your card. The rewards vary according to the program that you choose but you can redeem them for airline miles if you travel a lot for business, gas mileage, hotel rewards, dining, discounts on office supplies, cash back rewards and so much more. There is a reason why so many consumers and business owners flock to reward credit cards; they pay off and save them money. A small business can save thousands of dollars every year just by using rewards business credit cards to make their purchases. They can place all their expenses on that one card to get as much points as possible. The important thing is to pay off the balance monthly since these cards do come with high interest rates and these finance charges can negate any rewards received.
Check the terms and conditions before applying for rewards cards since there may be conditions. Find out if there are limits on the rewards that you can earn, if there are any purchases that do not qualify and what the terms of redemption are. Please also note that some credit card providers reserve the right to cancel any rewards if there are defaults in the payments.