What You Should Know Before You Apply for a Business Credit Card
Small businesses are being targeted to apply for a business credit card by major credit card issuers to expand their business. These major credit card issuers sent out 46 million credit card offers during the first quarter of 2010, according to Synovate. These statistics show that there is a 250% increase in business credit card offers as compared to last year’s statistics and only a 29% increase on personal credit card offers. Senator Charles Schumer believes that the credit card issuers are finding ways around the new restrictions on credit cards since business credit cards are not covered by the CARD Act.
Before Apply for a Business Credit Card
Business owners should study the benefits that the card issuers are offering before they apply for a business credit card. It is best to have a separate card for your business and for your personal use because it will protect your business’s finances and gives a clear accounting of your business’s expenses.
Before you apply for a business credit card, know the major benefits that you could get from a business credit card. These are higher credit limit, creates your business’s credit history, controls the employee’s spending for business purposes, different business perks are offered which you could take advantage of, and protects your personal credit files.
Advices to Apply for a Business Credit Card
With these benefits, it’s easy to convince business owners to apply for a business credit card. Here are some tips in choosing the right card for your business
1. Conduct a complete credit assessment. Know the type of assets that you and your business have so you’ll have an idea of which credit type you’ll qualify for.
2. Select the business credit application that you’re going to apply for. There are 6 major types of business application and choosing the right one will prevent you from committing mistakes and taking great risks.
3. Select the type of business credit card that suits your business’s needs. Each business credit card type have its own purpose so choose the type of card that best suits your business’s needs.
4. Match your criteria to the cards that are available. When you know the applications that you need and the type of card that suits your business’s needs, it is now time to look for the card that matches these criteria.
5. Review the credit card’s requirements for approval once you have found the card that matches your criteria. It is advisable that you know the requirements so you could prepare for these requirements. If your business doesn’t meet the requirements, personal guarantee might be required.
6. Set your own guidelines if you plan to give company cards to your employees. This would protect your company from incurring large debts.
7. Create credit guidelines to organize the purchases made and the payments being reported on the business credit report. You could set your own credit limit and set the payment date a few days before the due date to ensure that the purchases are within the credit limit and that no due date will be missed.
Last Advice to Apply for a Business Credit Card
If you decide to apply for a business credit card, it is advisable that you know your capacity to pay, the needs of your business, the benefits, and the charges to prevent problems and unnecessary expenses due to wrong decisions made and mistakes that are committed due to lack of knowledge