If your small business is thriving, then it is probably the perfect time to think about getting a business credit card. Since there are dozens of them available and many factors to consider, this can be a daunting task. In the following text, we are going to help you make this decision by listing all features a business credit card should possess.
Firstly, there are some things you should know about this type of credit cards. They should only be used for business-related expenses meaning that you shouldn’t use it for personal purchases. Also, they usually come with a higher credit limit, which is why you need this type of card since you will be making numerous purchases every month. Most importantly, when applying for a business credit card, you have to guarantee that you will pay off the balance with your own money in case your business profit cannot cover all the fees.
The next step is to exhaustively inspect every part of your company’s spending. Since every business credit card brings you some sort of reward, knowing your highest operating cost will allow you to choose the best one for you. This includes everything from phone service costs to travel expenditures. If you or your employees travel a lot, pick the one that offers rewards for flights and accommodation. Similarly, if you spend the biggest part of the day in a car, choose the one that comes with good gas rewards. If you have frequent meals with the clients, a card with rewards for restaurant fees will work the best for you. What’s more, some bank will allow you to redeem rewards you haven’t used, so this is another feature you should investigate. On this website, you will find a list of the best business credit cards.
On the other hand, besides rewards, we have to discuss expenses. The first one to consider is the annual fee. Some banks charge this expense, while others don’t, so you should really think about this feature since it can cost around $100. The best way to decide if this cost is worth it is to compare your annual expenses with the rewards a certain card offer. It is simple math. Besides annual fee, you have to investigate late fee that can go up to $49, returned payment fee, cash advance fee, balance transfer fee, and if you do a lot of traveling, the foreign transaction fee that is usually 3 percent of the transaction.
Furthermore, different banks offer different interest rates – the better the credit score you have, the lower the interest rate you will get. Many cards offer 0% introductory APRs in the first year, and after this period you will have to pay anywhere from 12.24 to 24.74 percent.
Lastly, we have to mention a bank’s customer service. This is really important in case of an emergency such as a lost or stolen credit card. You want to be sure that you can contact representatives at any time and that they will actually answer your call. Also, some banks offer live online chat, which can come in handy if you have a quick question.
All in all, these are some main things you should consider when choosing a business credit card. The most important thing is to investigate every feature thoroughly, to prevent any surprise expenses in the future.