There are various business credit cards on the market, each with its own set of benefits and terms. But there are some key characteristics all cards should share.
Make sure you fully comprehend the fee structure and Annual Percentage Rate (APR). Furthermore, pay attention to any rewards offerings as these could provide great added value if aligned with your business aims.
Credit limits
Small business owners frequently strive to obtain a maximum credit limit on their credit cards. From purchasing office supplies to renting an apartment, higher limits can help with business expenses. Credit card companies tend to increase limits if customers use them regularly and pay on time – this helps build credit as well as potentially reduce monthly fees.
The best business cards typically provide multiple benefits, from rewards and cashback to help improve finances and expense management and introductory offers with no interest charges over 12 billing cycles. To select the most suitable card for your company, use WalletHub’s business credit card comparison tool to filter features and compare offers side-by-side.
Interest rates
It is crucial when selecting a business credit card to carefully compare rates and terms. While certain cards offer lucrative rewards, others could include very high-interest rates or penalties for late payments. Selecting the ideal card can help manage expenses, establish credit scores for future growth, and unlock lucrative perks.
Many business credit cards also offer 0% APR purchases for an extended period. This can be an ideal way to cover costly purchases without incurring additional debt; just be sure to pay down your balance before the 0% APR period ends! Furthermore, certain cards report to personal credit bureaus, which could negatively impact your personal score; in order to avoid this scenario, select one that does not report directly.
Rewards
Business credit cards provide many benefits that can boost a small business’s bottom line, including special rewards, spending limits, employee card options and consumer protections. Furthermore, these credit cards tend to offer longer 0 percent introductory APR periods than personal cards.
Finding the appropriate credit card for your small business involves carefully considering its average spending, purchasing categories and reward goals. Other key considerations include commercial or joint and several liability; as well as features that support expense tracking and accounting needs – for instance, cash back or travel rewards credit cards may offer significant cost-cutting opportunities. A good starting point would be comparing business and rewards cards that offer cash back, travel rewards or other value-adds such as cashback.
Fees
Business credit cards can be an effective tool for small businesses, offering rewards that help save money and boost credit ratings. Furthermore, they make tax accounting simpler by helping separate personal from business expenses for the purposes of tax filings. Unfortunately, however, business credit cards come with drawbacks: signing a personal guarantee agreement means being held personally responsible if debts can’t be paid; plus, some business credit cards report directly to consumer credit bureaus, which could negatively impact your personal score should payments become late.
However, some business cards charge foreign transaction fees that may be quite costly; it’s essential to thoroughly compare terms and conditions in order to understand their true cost. Thankfully, some issuers provide consumer protections to their business credit card customers.
Regulations
Credit card issuers generally require business owners to provide personal information during the application process for credit cards issued for businesses in order to assess if the entity is financially responsible and likely to repay its debts. They also examine its credit history and score to assess eligibility for certain credit limits, interest rates, and rewards programs.
No matter the card, however, certain requirements remain constant: many business cards require an owner-signing a personal guarantee agreement; in order to qualify, other cards require proof of certain revenue levels or financial metrics; some cards also offer special features such as record keeping or expense management capabilities which could influence which card you ultimately choose.