No matter your type of business, applying for a credit card on behalf of your business can be beneficial if you are looking for a means to cover business expenses. You can purchase equipment, pay for subscriptions, structure your payments and build a good credit score with a business credit card. Additionally, you can earn loyalty rewards for tickets and even receive cash back on your credit card.
Knowing the right business credit card to apply for is also important. Certain business credit cards will determine what benefits you receive and if your financial goals are met. You might be wondering what type of business credit card will suit my business. There are so many card options available with a laundry list of terms and conditions. It may be necessary to consult an expert to work you through the requirements and determine which card is best for your business.
Getting approval for a business credit card is another step that could be a little bit overwhelming. Knowing the basic steps and ways to go about it could make a difference in receiving your ideal business credit card in no time.
Factors you should consider when choosing a business credit card
The first thing to do before applying is to decide the exact type of card you want. There are various factors to consider when choosing the right credit card for your business. Here is a list of the five (5) best practices we recommend:
1. APR Period: Depending on your purpose of getting a business credit card, you should look critically at the APR period. A 0% APR intro is usually better if you are seeking to improve your credit score. Also, you can extend your credit card debt without accruing additional interests. It is important to note that after the intro period, which is usually 12 months, you would be required to pay off your debts otherwise interest rates will begin to accrue, and your credit score will be negatively affected.
2. Annual card fee: Although this might seem like something to gloss over, it is important to choose a card with an annual fee that you are comfortable with. Cards with more benefits often have a higher annual fee than the others. You should look through the list of benefits and ensure that they all add value to you and your business. Otherwise, there is no need to pay for something you do not enjoy. Also, if you require some specific rewards, then you should consider going for a card that has them even though you might pay a little extra yearly for it.
Related: https://blkpreneurship.com/2022/03/14/benefits-of-establishing-a-credit-line-for-your-business/
3. Rewards System: Compare what cards give you the best results for the same value. Some card issuers give rewards based on points, others give cashbacks and mile rewards. Some cards also offer flat-rate rewards, meaning that whatever amount you spend, you get the same points. Others offer tiered rewards, meaning that you earn more points when you spend more. You should investigate these benefits and ensure you choose the best ones that your business will gain from.
4. Transaction fees: How much do you get charged when you do international transactions? This is an important question to ask before you decide to get a card. Within the US, the standard rate is 3% but could differ when you travel abroad. If you are going to be making more frequent international payments, then you should get a card that has no foreign transaction rate.
5. Bonuses: Some card issuers offer an introduction bonus for new cardholders when they spend a certain limit within a period, usually a month. This could earn you extra points and discounts. It is something to consider if you need some rewards as soon as you sign up.
Knowing which factors are valuable to your business is vital when choosing a business credit card. It is helpful to get a list of the requirements and benefits of every card issuer or credit card for proper study and comparison. Be sure to go for the best card that suits your business needs. The above methods for choosing a business credit card would guide you through the process and make it easier to make a decision.
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