Action Steps to Finding the Right Business Credit Card for You
The best contacts and resources to help you get it done

Choose business credit cards with low interest rates

A business credit card can be expensive when interest rates on the line of credit are high. Locate the most affordable credit lender offering the most flexible interest rates to ensure the business is not paying more than it should. Interest rates for businesses are dependent on the lender and on the business's creditworthiness. Expect to pay between 3% and 18% annually, depending on the company. To minimize finance charges, pay the balance in full within the card's grace period.

I recommend: Locate credit cards for small business with low interest rates. Credit Cards offers a regularly updated list of credit card offers available to small business owners. The company lists the current interest rate charged by the lender. This makes comparing costs easier. Bankrate offers a similar service, allowing business owners to get quotes for interest charges.

Determine the expense of fees on corporate credit cards

In some situations, small business credit companies charge fees for using their service. Fees may be membership fees or fees for multiple credit cards on the same account. Fees may also be charged to reward credit cards, including mile fees and cash back fees. Fees range in cost from $39 to $200 per year, depending on the line of credit. A statement of fees must be made available to the small business owner prior to applying for the line of credit.

I recommend: Use a business credit card comparison to locate the lowest associated fees. Services such as LowCards allow business owners to compare fees prior to applying for the line of credit. Look for annual fees to be listed for each credit line. The Federal Reserve Board displays all possible fees and gives an estimated cost for some.

Manage credit cards for small business to avoid excessive costs

When a small business has credit cards, small business management must maintain the credit lines effectively to reduce any charges that are not necessary. To maintain expenses, make payments on time. Keep credit card balances as low as possible to avoid over limit fees. Maintain the business' creditworthiness to ensure the business qualifies for low rate cards whenever possible. The cost of late fees and over-the-limit fees will range from state to state, with averages being between $25 and $39 per month, per overage.

I recommend: Pay the corporate credit card timely and pay as much as possible. The Federal Deposit Insurance Corp. (FDIC) provides information on the results of not maintaining credit lines effectively. Legally, businesses must provide a list of fee charges prior to application. Find out what they are by going to the Credit website.

Helpful advice for making the most of this Guide

• •  Choose the best business credit card based on a combination of each of these items. Locating the most affordable card can help a business save thousands of dollars each year on credit usage.

Guide to Business Credit Cards

Wise use of credit cards can impact your business in a positive way.

By Selena Chavis, Owner, SC Communications, LLC

1. Tips and resources to help you understand the basics of credit cards.
2. Advice on choosing the best credit cards suited for your business operations.
3. Information on credit limits, credit scores and how to improve them so you can get the best interest rates on credit cards.
4. Steps to manage debt and make small business credit cards work for you.

Action Steps
The best contacts and resources to help you get it done

Get the credit card features your business needs

The business of credit cards has become very complex. From varying interest rates and finance charges to grace periods and rewards programs, understanding the nuances of the best credit cards can be daunting. Add to that the fact that every business will likely use business credit cards in a different way, and it becomes imperative that business owners match their unique circumstances to particular credit card features.

I recommend: Compare interest rates, finance charges and perks of leading credit cards through CreditCards.com and CreditCardGuide.com.

Secure the best credit cards for your business

The most common credit cards - Visa, Mastercard and American Express - are widely available. The largest share of the market is comprised of large banks such as Citibank and Bank of America, but many smaller institutions also offer competitive small business credit cards with a number of perks - such as no annual fees or payback rewards.

I recommend: Visa, Mastercard, American Express and Discover all offer resources for small business credit cards that allow you to shop online for the best credit cards to meet your needs.

Use business credit cards to manage cash flow

Small business credit cards can help you maintain your cash flow. When funds are low, credit cards can be a great source of interest-free, short-term loans and can allow you to make important equipment purchases. Be sure to develop sure-fire strategies for managing credit card debt to ensure continued positive cash flow.

I recommend: Bankrate.com offers a credit card calculator that helps businesses determine the “real” cost of debt as well as what it will take to pay off the balance of business credit cards. Keep these costs in mind when forecasting cash flow.

Track employee expenses with business credit cards

Use business credit cards as a way to track and manage employee expenses. When employees use business credit cards to make business-related purchases, such as entertainment or travel, you'll have a monthly record of all activity on the account.

I recommend: Discover offers free employee credit cards with real-time spending limit control and lets you view statements online and sort charges by employee. The MasterCard Business Card also lets you set employee spending limits to control your finances.

Take advantage of credit card rewards programs

Business credit cards that offer rewards for using the card can pay off. For instance, if you travel extensively for business, look for a credit card that offers airline or hotel rewards. Similarly, retail rewards can often be used to purchase office supplies and other office equipment.

I recommend: LowCards.com offers comparisons of business credit cards and the rewards programs they offer.

Increase credit limits and lower interest rates on business credit cards

To ensure that you get the buying power you need from small business credit cards and to minimize the amount of interest you'll have to pay for that privilege, you need to have a good credit score.

I recommend: Bankrate and FICO offer strategies and tips for improving your credit scores, which can help you increase credit limits on business credit cards and reduce interest rates.

Helpful advice for making the most of this Guide

• •  Be aware that credit cards offering a 0% introductory rate, often have interest rates that are higher than average after a certain period of time.
• •  Take advantage of travel incentives, payback rewards and other offerings when choosing small business credit cards. Depending on your needs, these advantages can sometimes outweigh a lower interest rate.
• •  Consider going local for business credit cards. The hometown bank that manages your business account may be more competitive than the national bank that just sent you an offer in the mail.

Action Steps
The best contacts and resources to help you get it done

Compare business credit cards for lowest rates

With any business credit card, the most important factor is affordability. Low interest rates vary based on the business's creditworthiness. Lenders are willing to provide a low-rate card to those businesses with the ability to pay. Business owners may even find introductory offers with exceedingly low rates available to them.

I recommend: Look to credit cards for small business with low interest rates. Credit Cards offers a comprehensive list of credit card offers including explanations of interest rates available for each. Credit also offers a list of available credit cards for small businesses. The company allows for easy comparison of interest rates.

Find the best business credit card offering rewards

Do a business credit card comparison of rewards offers. Rewards are lucrative since they can be used to pay for business air and travel costs, cash back or other products and services. Businesses planning to use their lines of credit regularly can see a monthly payback from the credit card company making it more affordable to borrow on credit.

I recommend: Choose business credit wisely with rewards programs. Ensure that interest rates are still low and there are no additional fees associated with such services. CardRatings offers a wide selection of business credit cards including rewards cards. Compare the costs associated with interest rates. CreditCardGuide also provides a full list of options.

Maintain small business credit to free up capital

Credit cards for small businesses are a good way to free up capital within a business. The business' cash doesn't need to be immediately available to pay expenses. A credit card can be used to pay all expenses. This allows the business to monitor all monthly expenses in one account. Accounts payable and profit sheets are easier to maintain.

I recommend: Gather information from CreditCardFlyers on cards available to use as expense management tools. The Christian Broadcasting Network provides some help on the potential problems associated with managing expenses through credit cards that all business owners should keep in mind.

Helpful advice for making the most of this Guide

• •  Corporate credit card lines for a business can be difficult to obtain for a start up business. In some cases, the business owner may use his or her credit history to help guarantee the card. Later, the owner's name may come off to allow the credit to stand in the business' name only.

Action Steps
The best contacts and resources to help you get it done

Interest rates

Interest rates are variable percentages that have been set and defined by the creditors according to their own terms and conditions. Providers put these charges in place to bill clients based on the account balance on their small-business credit cards.

I recommend: Rising interest rates are explored at 247WallSt.com, while low-interest business credit cards can be viewed at IndexCreditCards.com.

Collateral

The term 'collateral' refer to items of a specific and given value that may be documented in order to guarantee the payment of a loan or a debt.

I recommend: OmniGlot.com explores the benefits and risks of secured credit cards, which utilize collateral.

Liability

The liability of a small-business credit card states that the individual holding the credit card is in charge of the credit card and the overall small business credit card account. Also, the account holder is responsible for what happens to the credit card and the account. Many small-business credit card companies, for example, will declare that they are not liable for lost or stolen cards.

I recommend: The personal liability of small-business credit cards is discussed at SmartMoney.com and InsideFlyer.com.

Protection

Protection refers to the optional insurance an individual or entity may place on a small-business credit card in order to protect the account holder during a variety of situations. For example, the protection may assist account holders when they are unable to make payments or when the card is lost or stolen.

I recommend: The risks and benefits of a credit-card protection plan are discussed at BankRate.com and LendingClub.com.

Grace period

The grace period of a small-business credit card refers to the amount of time that a creditor will allow the account holder to go without making payments or charging the account holder interest on the account balance.

I recommend: Using the grace period of a small-business credit card can lead to effective use of the card, as explained at SBInformation.

Unsecured card

An unsecured card is a credit card that does not require items of value (collateral) to be documented to affect the limits on it. The unsecured card is free and clear for the individual to use without putting items up as collateral. Once the account holder has proved capable of making payments in a timely manner, the creditor will often increase the credit limit.

I recommend: More information about unsecured small-business credit cards can be obtained at GoCalico.com.