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Credit Cards and Small Businesses

Francine L. Huff
LoanBiz Columnist

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Credit card offers for small businesses are plentiful. But it's important for business owners to choose the right credit cards for their needs. The following checklist will help small companies shop for the features that can help them grow their business.

Compare Perks and Benefits

Not all credit cards are the same. That's why business owners should give careful thought to the types of perks and benefits that are important to them. Many credit card companies offer rewards programs, but it's important that business owners make sure the reward is something they need and want. For example, people who travel a lot may want a card that earns airline miles or discounted hotel stays. Some credit cards may offer discounts on office products.

Credit Card Reports

The survival of a small business often depends upon how well its owner manages cash flow. Credit cards can serve as short-term loans to make purchases of supplies and equipment when it's not practical to obtain a business loan and cash isn't readily available. Cards can also be given to employees for necessary purchases. A credit card that offers quarterly and annual itemized expense reports can be helpful for tracking purchases and preparing taxes.

Choosing a Credit Card Company

American Express, Discover, Visa and MasterCard all offer credit cards for small businesses. While large banks frequently send out credit card offers to small businesses, it may be worth it to check out cards offered by smaller, local banks that may provide better terms. Some businesses may find more competitive interest rates and other features by applying for a credit card at the bank where they have a checking account.

Interest Rates Matter

Of course one of the main things anyone looks at when applying for a credit card is the interest rate. Like personal credit cards, small business cards often offer low introductory rates. Taking advantage of such teaser rates can allow a business to immediately tap a credit line and have a period of time to pay for purchases without high interest.

Taking Credit

A true business credit card is in the name of the company itself, not the owner. Usually a business tax ID or employer identification number (EIN) will be required when filling out the application.


About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.

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