Is Your Business Ready for a Credit Card?

Small business owners often use their own credit cards for business reasons as new business begins to get off the ground. If your business has been in the start-up phase for a while and profits are beginning to stabilize, it may be time to consider applying for a business card.

With Small Businesses In Mind

Small businesses have special needs than consumers and large corporations. In years past, credit card companies weren’t partial to the entrepreneur/small business set and therefore did not offer many incentives. Now, cards have come a long way. They have actually put a focus on what small business owners need.

First, small business credit cards help a start-up company build its own credit foundation, allowing a separation between the owner and the company. This is an important transition for companies looking to make it long-term on their own financial standing. If a business relies too long on its owner’s money, it can be difficult to find success.

The second thing a small business credit card does for small businesses is offer incentives that can help a business get off the ground. Many credit card providers offer discounts at office supply stores or even cash back rewards for each swipe of the card. There are many incentive and rewards programs available to help the small business owner get ahead.

The third benefit of a business credit card is many have been designed to grow with a business. Business owners need to have a plan in place to keep money coming back into the business for growth. Otherwise growth may not be an option and that can spell trouble for a business. With the right credit card and responsible credit card spending, a business credit card can grow nicely alongside a business to ensure financial needs are met.

Finding the Right Business Card

If a business does not yet have an established credit history, the owner’s credit score will be utilized on behalf of the business. It is important to consider that score before shopping for a business card. Because there are many business cards on the market, business owners need to find one that is compatible with the needs and goals of the business.

There are many incentive programs, interest rates, and other terms that should be considered and compared before a decision is made. It is unwise for a business owner to apply for multiple credit cards just to see which they will be approved to receive. Doing so can hurt a business’s starting credit foundation.

Affordability should be a priority when reviewing credit cards for small business. If an interest rate is too high or a credit limit is too low, the card may not be helpful at all to your business. If you are confused by any terms included in the credit card agreement, be sure to speak with a customer service specialist at the credit card company and address your concerns and questions before submitting an application for credit.

Protecting business credit is important so only apply for a credit card or two that really matches your company’s needs. Using credit responsibly and paying off balances in full each month will strengthen your credit foundation and allow you to obtain even stronger credit cards and other financing in the future.