Small-Business Credit Cards Key Terms

Understand the subtle yet important concepts of small-business credit cards
By Christine Foley Small-business credit cards allow companies to make a wide variety of purchases. In order to get such a credit card, businesses are required to fill out and sign an application, which is a legally binding contract. As with any legal document, businesses should be aware of the terms and conditions to which they are agreeing. In addition, not all of the subtle nuances and important small business credit card key terms will be on the application or in the terms and conditions of the card; they may also be on one's monthly statement. Make the most of your small business credit card and understand important concepts by familiarizing yourself with small business credit cards key terms and jargon.
 

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