Credit Cards and Small Businesses
Francine L. HuffLoanBiz Columnist
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.
