Before You Start To Compare Business Credit Cards...
If you are ready to compare business credit cards before making application, you need to know what to look for. Your choice will be based on the credit rating of your business and on the credit line and special benefits that would enhance a business credit account.
Evaluate Your Business Model
Have you established credit in the name of your business? This might be through paying any loans you took prior to starting the business or loans used to buy equipment, etc. When you apply for a business credit card your business must have a credit file established.
If your business does not have sufficient credit established, you may be asked to list the assets of your business. If you own the building or have equipment used to provide the product or service you sell, you may be able to qualify for a credit card in the name of the business.
Check Your Credit Ratings
If you have no physical inventory and your business is new, you may be required to use your personal credit rating to guarantee the business credit cards. Clearly, this is not ideal but in many cases the lender will allow you to remove yourself as a guarantor of the credit line once the business has established its own good payment record.
Business owners who are unsure of the information that might be in their business credit file with the major credit rating agencies should request a copy of both the business and their personal credit reports. Do this prior to applying for a business credit card.
If your application for a credit account is declined, that adds a piece of bad information on your credit file. By looking closely at your credit rating you have the opportunity to ask for any incorrect and potentially damaging information be removed. Once you know your credit rating is good, your choices of lenders can be based on what you want in a business credit card rather than only on what you may be able to qualify for.
Choosing a Credit Card Lender
The best source for a business credit card may be your own bank. If you have a good financial reputation with your bank it may be possible to obtain a business credit card even if the business credit file is currently thin. Make a list of business credit cards offered online by major banks and carefully compare the offers. If your business requires frequent travel you may choose to apply for an account that rewards you with mile as a bonus when the credit card is used.
Business owners who must travel for days at a time may choose a business credit card that focuses on discounts on rental cars, hotel rooms and dining out. If the credit card will be used to pay for monthly or quarterly supplies and seasonal stocking of your business, a credit card that offers a percentage of cash back or discounts can save you money over a year’s time.
Determine Your Financial Needs
When you compare available business credit cards, look for the tools associated with the account. Some banks include reports that allow you to identify purchases by category, flag purchases by category or item and track purchases by setting alerts that will notify you when a charge is made.
How much credit does your business need? Calculate carefully the amount of credit your business will need to use each month. Keep in mind this amount should be paid off monthly except in rare instances but it needs to be sufficient to meet the credit needs of your business. That amount is the amount you will apply for when you request a business credit card.
Other Considerations
Miscellaneous features are also items to look for when you compare business credit cards. You may want a card that is widely accepted by merchants and has no annual fee attached. Customer service accessibility may be an important factor or you may wish to use a bank that has branches in your area. If you need to issue additional cards to employees, you need to know if there are extra fees involved and what limits can be set on employee use of the credit card.
Conclusion
When you compare business credit cards, know what to look for. If you know your credit rating for your business, carefully consider how the card will be used and what credit line you need you will be ready to apply for a business credit card that suits you and your business needs.
