Business credit cards prove handy for many business owners, from small ventures to large enterprises.
As you've probably guessed, a business credit card is similar to a personal credit card, except it's used for business expenses. Unlike a regular credit card, business credit cards are personalized. You can have your name and your business’s name engraved on the face of the card.
Most business credit cards come with great features. This includes rewards, travel insurance, business coverage, points, and cash-flow management tools. You can add authorized users to your account and issue credit cards to your employees.
Business credit cards make tracking expenses easier for your accounting and bookkeeping departments. They can also improve your credit score when used responsibly.
You'll have a credit line with a pre-set credit limit like a regular credit card. You'll be responsible for paying down purchase balances every end of the month. Your business credit card will also incur interest equal to or higher than a personal credit card.
You can use this credit card for small expenditures like stationery purchases. Alternatively, your business credit card can fund a business trip.
Business credit cards have their advantages and disadvantages. Therefore, before getting one, it’s best to consider them.
With so many business credit cards in the market, it can seem like a daunting task to pick a card. Here are some pointers to finding the best business credit card for you.
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Yes. There are several differences between these cards. First, business credit cards are suited for small businesses and new entrepreneurs. Corporate credit cards are ideal for large enterprises and seasoned businesses. A credit line is opened for the company independent of the owner.
You’ll need to have a business or operate as a sole proprietor to apply for a business credit card. Also, your application will need to include documents such as your:
As long as you have a good credit score, your application will be approved.
You can apply for a business credit card online or over the phone. When applying over the phone, someone from the credit card company will guide you through the process.
Get a credit report from Equifax and TransUnion to assess your credit score. You can get a free copy from these two credit bureaus. Ensure that you fix errors on your report before applying for a business credit card.
Distinguish between promotional and permanent interest rates. Promotional interest rates are often lower, and they remain for a limited period, such as six or nine months. These rates eventually reset to a higher standard rate. Ensure you find out which rate is which to avoid accumulating a high balance after the promotional period.