New businesses need a starting place of spending capital to create a successful venture. In the past, many new business owners had to rely on their personal credit and savings to secure goods and services for their business. In the present day, this is no longer required.
Most credit card companies have recognized the necessity of providing credit to the small business owner. Of course, the credit card companies are making their profit as well, and that is their exact incentive.
A credit card for a small or new business can be a powerful monetary tool. Although the terms of a personal credit card prevents their use for business expenses, especially cash advance to cover payroll costs and inventory purchases.
While the acquisition of a new business credit card is a relatively simple procedure, it involves more than simply using your business name on the card. Acquiring a valid credit card to be used for your business purposes involves a few simple measures.
You can begin the process by separating your business expenses from your personal expenses.
You should go on with the process by researching credit card terminology and the various business credit card plans that are available. Each credit card company sets their own guidelines for things such as interest rates, late fees, grace periods, cash advances, and more. You must select the card that will best suit the needs of your business.
After you select the credit card company that you will obtain your business credit card from, verify that the company will report to the business credit reporting agencies all of your business credit activity. To assist this process, open a file with each of the business credit reporting agencies for your business credit history.
Next, prior to the actual application for a business credit card, the small business owner should establish a positive business credit history. This can be accomplished by securing a few vendors who will extend a small amount of credit to your company. Make a few purchases through these vendors and pay promptly. Ask of the company’s to report your payments to one of the business credit reporting agencies.
Additionally, applying for a credit card for your business with a company that you already have dealings with will make the process that much quicker and easier. You should limit the number of credit cards to one for your business. Multiple cards are not necessary.
Always pay promptly. Making payments online should be quicker and easier. Since checks clear more quickly these days, take advantage of the grace period offered by credit card companies and use the plastic method for purchasing goods and services. Also, you should avoid using credit cards for cash advances. Fees are usually assessed against the account and this will deplete your financial resources much more quickly.
Another bonus of having a business credit card – it will make the job of tracking expenses easier with end of the year summaries that most credit card companies offer to the credit card holder. Business credit cards with preset limits can be used to limit and control employee expenditures for the company, as well.
Rewards and incentives that come with a business credit card may come in handy and save additional money later on down the line. Plus, a positive credit history can be established with proper use of a business credit card. In turn, this can be used to secure future loans or sources of credit.
Owning a business credit card may provide an air of authenticity to the business, especially when the business is new. It is important, however, to note that some credit card companies will charge additional fees for things such as, additional credit cards for employees and annual fees. But this cost is insignificant when compared to your peace of mind that is can be provided with a simple and reliable source of financing for your business.
Getting the best credit with rewards , you need a credit card, so why not get the best rewards to go with them?