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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. Annual fees can easily reach $150 per year, plus extras. If you only need a credit card to make simple purchases, pick a card with an introductory "interest free" time 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. It may be true that at some point, you'll need to face a problem with a business credit card. In this case, you'll need information quickly. Many companies have a website with a frequently asked questions page. This is a great place to start when you need questions answered. More than likely, someone else has already faced an issue similar to yours, so that your answers will be right there. Most companies will also provide a phone number so that you can talk with a customer service representative over the phone; most of these companies also have the ability to talk to a customer service representative via an online messenger program directly on their website. Try one or both of these methods out and see what customer service response is before you agree to sign up for a certain card. If you need to apply for business credit card, be smart. If you have a small DBA business, it's likely that you don't need a credit card at all. However, make sure you manage your credit card effectively so that you don't negatively impact your credit score by poorly managing your business credit card charges. |
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