Reprinted Articles

There is much advice available about how to find the small business credit card for your company and most of this advice tends to include phrases such as ‘using your credit card wisely’ or ‘well-managed business card account’. There is also a lot of jargon surrounding the cards themselves, sometimes making it difficult to discern which card is actually offering you the services and facilities that are best for you and your business. The recent boom in small and home-run businesses has made the demand for these cards even higher, but what is the important information, the stuff you really need to pay attention to?

Firstly, the income and outgoings of your small business; as the owner/manager, you need to have a good idea of your company’s turnover. Once you’ve worked that out, you’ll have a better idea of the type of and amount of credit that you feel you need to apply for. Next: what’s the card going to be used for? If it’s for other employees to use, then how are they going to use it? Will it be for petrol, hotel bills or stationery? Having a serious think along these lines will help you cut through the mountains of offers that are out there and highlight those that are relevant to your company. When it comes to any type of borrowing, there’s also the issue of repayments and a reasonably thorough look at your company’s finances should be able to tell you just how much your company can sensibly afford to borrow.

The key to a ‘wisely managed small business credit card’ is summed up in the third point. Regardless of how much credit you decide you need, once that has been agreed it is prudent to stay within the parameters of that agreement. Often it is thoughtlessness and careless spending that incurs penalties that can easily be avoided.

Credit card companies do not want to continually penalise; their service revolves around the assumption that you are intent on making your business successful and they are continually introducing services to help you minimise unnecessary expenditure. Most of the major banks offer the facility to pay your card balance online, which not only saves money but also saves you the time and inconvenience involved in having to pop in to your local branch. Using this facility to ensure that your business credit is paid off and in full each month can only help your company to generate its own positive credit rating and make application for further and larger credit amounts easier in the future.

However, as exciting as perks can be, it is best not to get distracted by them and try to remember what the card is for: a convenient way of accessing funds and minimising cash transactions. You’re going to need to think about things like interest rates - a major factor when choosing your credit card. Some cards offer 0% interest on purchases for a number of months as an introductory offer, after which point the APR defaults to the issuer’s standard rate. Tie in balance transfer deals and you’ve got a lot of research on your hands!

Small business credit cards are the most popular in the business credit card world and have several specific advantages over consumer plastic in that they allow you to keep your business and personal expenses separate. They allow you to begin to establish a credit history for your business which is important for its future, growth, expansion and future credit prospects. They often have trade discounts and low interest rates. With the variety of cards and associated deals out there, there is sure to be a small business credit card to suit the needs of your organisation. Since credit card companies now firmly have their sights set on the small business, the range of incentives is only likely to increase - meaning greater benefits for those who are prepared to manage their business credit card wisely and responsibly.

Tags: Finance