Most Frequently Asked Questions About Business Credit Cards
Using a business credit card can be a great thing. It can help you keep a close eye on expenditures. If you have a business credit card, your accountant may very well applaud you. A credit card can greatly help lighten your accountant's workload and he or she will have a lot less work to do than with cash transactions when it comes time to prepare your tax paperwork.
However, whatever the reason or reasons you choose to have a business credit card, there are still things you need to know about the terms and conditions attached to such a card. For example the annual fee for a business credit card is higher than that of a personal credit card.
You could find yourself paying as much as $150 per annum for cards with extras but if you simply need a credit card to make basic purchases, you would be best choosing a card offering an introductory interest free period.
This actually means that you will pay no interest whatsoever for a given period and this can be anything up to twelve months or so. This is super news for new businesses when all manner of setting up expenses are incurred ? it could almost be looked upon as an interest free loan!
Your statement shows when the payment is due and this is the last date your money must be received by the company. Some cards such as American Express require that you pay the balance in full each month, so make sure you take a good look at the terms of any credit card before signing up. If you run over there will be no hesitation on the part of the company to apply a late payment fee onto your existing balance and if you are not on an interest free or fixed rate card, you are likely to be penalized for late payment by an increase in your APR too.
The Annual Percentage Rate (APR) is the amount of interest you are charged on the balance outstanding on your credit card. Choose a fixed rate as opposed to a variable one so that the company is not given the option to up your rate of interest for a late payment. This way you can at least keep an eye on your budget. There is nothing to stop you shopping around for a new interest free or low rate introductory offer card if you find yourself paying higher interest rates than you can afford. You are often allowed to transfer balances as an incentive to take out a new card and this can save you quite a large amount of money over a period of time.
Business credit cards can also be used to obtain emergency cash for your business. However, the interest charges for cash advances tend to be higher than for purchases and you will be charged this high rate for as long as the equivalent amount of your advance remains on your statement. This can end up being quite expensive so it is a good idea to minimize your use of the cash advance option to genuine emergencies.Your business credit card can contribute to the smooth running of your business, so when things go wrong they need to be dealt with quickly. It is a good idea to have the contact numbers of your credit card provider on hand so that you can solve problems without delay. You may also be able to find answers to any questions on your provider's website. Look for a 'Frequently Asked Questions (FAQ)' page and scan the questions to see if your concern is listed. You may also be able to directly contact the company with your concerns via their website. However, as long as your credit card company has a reasonably quick telephone response time, it may be easier to simply contact them by phone. It is a good idea to test out a company's customer service before actually applying for a card with them.
Be sensible when considering applying for a business credit card. For example if you are running a small DBA business, you may well not need a credit card. As the credit will be built under your social security number, you have to be sure than you can manage the debt in an effective manner.
Nick Makaryk is an Editor, Freelance Writer, and Owner of Best Credit Cards . A Free consumer credit card comparison web site helps individuals find the Best Credit Card while avoiding high interest rates, charges, and fees.
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