These days, many owners may be anxious to try to expand their companies and get a firmer financial footing, and one way in which many choose to do so is by obtaining their small business credit card. However, those who want to do so should proceed with caution when making such a decision, as not all accounts are created equal.
There are a large number of small business credit cards now available to owners who want to give their companies more financial flexibility going forward, but there are many things to keep in mind when pursuing such an account. For one thing, it's important to remember that as with consumer credit cards, it's always a good idea to shop around for the best possible deals.
Of course, one of the primary factors that goes toward determining the kinds of deals one's company gets is whether it has been able to borrow before, such as if it has received a small business loan. If so, and such accounts have been handled properly and are in good standing, it's likely that there will be a wider variety of more beneficial deals available to the company because it has a demonstrable, good credit history. On the other hand, those businesses which have had no accounts in their name might find their options somewhat limited. In these cases, owners may have to list themselves as co-signers on the accounts as a means of getting approval and better deals.
When obtaining a small business credit card, owners should think carefully about exactly what they need from such an account. For example, if they're planning to use it mainly to buy office supplies and other necessities to keep their companies going, it's probably wise to find one that grants more significant rewards for doing so, and many small business cards give borrowers just such an option. However, if the account will be used for other expenses, such as covering employees' travel costs, finding features that are better tailored to reduce borrowing costs and similar concerns is likely the wiser course of action. As with consumers who get airline miles cards but don't fly often, obtaining a card that will both give the most rewards for the things being purchased on it, and also provide the biggest benefits when it's time to redeem, can be a major boost to a company's financial future.
Something else to look out for
Owners should also keep in mind that the rules related to credit cards for businesses – regardless of size – are not the same as those for consumers. As a result, those who have never used a business credit card might be surprised to learn that while their own accounts cannot see significant changes to pricing like interest rates or fees without long-term advance notice, that is not the case with those for businesses. It's similarly important that they take the time to understand the potential penalties they will face if they miss a payment, because the fees and rates that can be applied to these accounts as a result are typically much higher than those for consumers. That, in turn, can significantly endanger small businesses' finances going forward if they're not careful about credit.
Having the best possible credit card can save businesses money and even earn them significant cash back bonuses, which can help to build a company's coffers. This may be important going forward because of the rising cost of small business insurance policies for everything from healthcare to workers' compensation.