Having a business credit card makes it easy to manage expenses and track your accounting expenditures. It makes it very convenient to access your funding.
The use of business credit cards can be a convenient way to get access to funding and it not only increases your purchasing power, but is a versatile financial tool to carry cash.
Major Types of Business Credit Card and How to get it
Business credit cards are available to businesses of all sizes. A business credit card comes with larger credit limits and you will have to pay interest if balance is carried after billing cycle. Basically there are two types of credit cards: secured credit cards and unsecured credit cards.
A secured credit card requires collateral or security deposit which serves as credit line. It can help business with little credit history or poor credit to build up credit. It is easy to get secured credit card approved.
Unsecured credit cards do not require such security but you need to have good credit to get it. Even if you can manage to get unsecured card with poor credit, you will have to pay very high fees.
If you have secured business credit card and can build good credit over the time, you can convert it to unsecured credit card. Secured credit cards are offered at very less annual fee, some of the credit cards are available at 0% fee.
If you are to apply for a business credit card, you check your personal and business credit ratings. If you have low credit rating, you should consider applying for a secured credit card. Once approved, you will start establishing credit if you use it responsibly and wisely. Once credit history is built, you can apply for unsecured business credit card.
Advantages of Business Credit Card
- Easy Approval: It is much easier to qualify for a business credit card owner to get approved for unsecured business credit cards, as opposed to a traditional bank line of credit or small business loan.
- Financial Back Up: When you operate a business, you do face cash flow problems at times and you need money to purchase supplies, equipment etc. Your business credit card acts as a cushion when sales are low or if you are stuck with cash flow.
- Build Credit: Wise use of business credit card and on-time payments helps you build credit which is of great help when you need additional credit line, to get a loan approved or have to get reduced interest rate.
- Rewards: Most of the business credit cards offer your rewards and incentives on usage of it such as discounts, travel rewards, cash back offers etc.
- Online Purchase: Most businesses purchase supplies and services online and do pay online. Credit cards are very convenient to make online payment.
- Financial Record Keeping: When you use a business credit card, you get monthly summary statement providing details of transactions made during the month. It is very helpful to keep track of expenses and for record keeping. Moreover, there are various online services provided to manage your credit card account online.
- Flexibility: Business credit card offers much flexibility in comparison to a loan. You are provided with several options to pay your billing cycle.
There are several providers of business credit cards having various features, benefits, rewards and functions. You apply for business credit card that suits your need; it helps you run your business well. Read more articles on activateenter.