Small Business Credit Card Plans To Look Out For

A small business credit card is an important tool that can help a company leverage their finances and help them make vital purchases. When the right card is selected, a company can benefit from it's tracking and control expenses.  Additionally, it can help with purchases  when cash is not readily available. If the wrong credit card plan is selected, however, the potential cons can greatly outweigh the pros. With these things in mind, it is important to consider the best plan for a specific business and shop around to get a good offer.

The Types Of Offers Available

Small business credit card plans and offers can vary greatly. Some options business owners might run into include:

  • Low introductory rate plans – This type of small business credit card plan will offer a very low initial interest rate that will increase at some point in the near future. This type of offer is generally designed to entice potential clients to sign up. Low rate offers can work out if the effective rate is not high. Be certain to take a look at effective rates.
  • Payment options – Some small business credit cards are designed to have their balances paid in full at the end of each payment cycle.  Other cards operate like personal credit cards with monthly minimum payments. Both have their pros and cons; if your business is a point of sale transaction, a monthly card will typically work for your company's needs. However, if you have a few months of lag time between received payments, a line of credit may work better for you.
  • Rewards cards – Some small business card offers involve rewards plans. These might include cash-back bonuses, travel rewards or merchant discounts.  Seek out the discounts and cash back offers that will benefit your type of business.
  • Bad credit offers – Businesses that have bad credit can sometimes obtain special offers to give them access to cash when it is needed. These cards may have higher interest rates and other lender safeguards.  Be careful because these cards can be detrimental if they are not used properly.  For example, a rate can be increased if a payment is missed, leaving the company with higher debt. 

Selecting A Plan That Fits Company Needs

A small business credit card is not one-size-fits-all. Some offers simply fit one business better than others.  Before choosing, consider the following:

  • The company’s credit rating – Businesses with high credit scores should stick to their guns to obtain the best possible interest rate.  If a company has a poor credit rating, rate flexibility will be required because lenders will only offer higher rates.
  • Access to liquid assets – Pay-in-full monthly credit cards can be beneficial for keeping accurate company records, but they might not prove useful for business that does not have access to cash for payments.
  • The amount, and types of expenditures – Cash-back rewards and travel bonuses can prove beneficial if the interest rates and other terms are also beneficial. If travel expenses are a large portion of a company’s expenses, for example, this type of small business credit card would make sense. Cash-back bonuses can add up to true savings if interest rates are reasonable and a card and its payments are handled responsibly.

Applying For A Card

Once a small business credit card plan is selected, the next step involved in obtaining a card is the application process. Companies should proceed with care and try to hold out for the best possible offer that fits stated needs.

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