How to choose the right small business credit card
If you are looking, for additional financing, for your small business, you may be considering using a small business credit card. However, it is important that before you simply just choose the first one that is available to you, that you understand the intricacies of business credit cards. Small business credit cards provide you with a wonderful opportunity to meet unexpected expenses and keep your business afloat. However, there are certain things that you should be aware of, before you sign on the dotted line. Here is what you need to know about how to choose the right small business credit card.
- Understand what the card is all about-This means that you should be aware of the three major components of small business credit cards. These are-
1. What is the interest rate?-Obviously the lower the interest rate, the better. This is where shopping around really can pay off. In addition, if you are planning to transfer balances or purchase along with the credit cards, you need to make sure you are getting a lower interest rate.
2. Are there any annual fees? - It is important to understand that a lot of business credit cards have annual fees attached to them. You should be careful with the annual fees, as they can be charged to your account every quarter. Keep in mind that while you may think you are getting a credit card that has some free rewards, you could be signing a contract that says you will pay annual fees for those rewards.
3. What will be your credit limit?-You should know exactly what your credit limit, and if there is a fee if you go over. Small business owners should understand, however, that if their business credit card limit is to low, it may be of little use to them, to high and you are opening yourself up to temptation.
- Here are some other things you need to search for when you are shopping for small business credit cards:
1. Annual Percentage Rate (APR)-It is important to keep in mind that your APR can have a huge impact on your small business cash flow. You should look for a lower APR in order to save money when you borrow, for your small business.
2. Introductory offers-Keep in mind that when it comes to acquiring small business credit cards,for your business you need to take a look at the introductory offers. If you need to access a lot of money up front, you should look for the credit cards that have introductory offers with a 0% interest rate for at least a year. These low introductory offers can be a great opportunity to gain the money you need in a hurry, without needing to pay a high amount of interest on the loan.
3. Grace period-You should know exactly what your grace period is. You need to work with credit card lenders that have flexible terms. You should try to find a credit card lender that can offer you a few months to repay the money if you have cash flow challenges that suddenly arise. Keep in mind that most grace periods are 30 days, but there are some companies that will offer you a grace period of 60 days or more if you need it.
As a final note, be sure to shop around with multiple lenders, when you are trying to find the best business credit cards. It may not be easy to find a decent credit card, for your business so it's always a good idea to check online lenders, as well as traditional lenders.
