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The Perks of Owning a Small Business Credit Card

Credit Card Types

If you own a small business, then you may have considered a small business credit card. You may need a small business credit card, regardless of the size of your business. In other words, if you have decided against a small business credit card simply because you don’t think your business is big enough then think again. A small business credit card can offer you and your business many advantages that personal credit cards simply can’t.

But what is a small business credit card and how can it serve you as a small business owner?

• Online Tools – Small business credit cards often comes with a wealth of money management tools. These tools, often available online, help you, the small business owner, to track and organize expenses in an effort to maintain accurate records. The online tools offered by many credit card companies for their small business credit cards also enable you to monitor the spending of your employees should they need to make business-related purchases.
• Larger credit limit – Small business credit cards often come armed with a much higher credit limit than standard, personal credit cards. If you are starting your business and need assistance from time to time, then a larger credit limit is ideal for you. In addition, if your business requires that you make large purchases, then a higher credit limit will certainly come in handy.
• Separate from your personal accounts – A small business credit card is a practical alternative to using your personal credit card to make business purchases. In order to ensure accurate bookkeeping, it is important to keep your personal accounts separate from your business accounts; therefore a small business credit card may become very useful.

When searching for a small business credit card, remember that interest rates, credit limits and reward programs differ widely from one card to the next, as do the services they offer to small business owners. It is therefore important to take your time and compare small business credit cards to be sure that you have chosen the one that is best for you and your business.

Five Reasons to Have a Credit Card

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Contrary to popular belief, credit cards are not our enemy. In fact, they can be extremely beneficial to us in many ways. Of course, handling our credit responsibly is of the utmost importance, so it is vital that we become educated on how to responsibly use credit cards before we get in over our heads in credit card debt.

If you are prepared to handle your credit card debt in a responsible manner, then you should understand the many ways in which credit cards can help you and your credit.

You should have a credit card to:

1. Build your Credit Score - In order to have good credit, you must first have credit! A good credit score typically shows credit in different areas; namely, installment loans and credit cards. Creditors are unlikely to approve you for larger loans such as cars and homes if you have not proven your credit worthiness. And a credit card is the way to show this!
2. Build your Credit History – Just like building your credit score, a creditor simply can’t consider you a good credit risk if you don’t first establish a strong credit history. A great way to establish your credit history is to charge several purchases each month and pay off those purchases in full at every billing cycle.
3. Protect your Investments - Many credit card companies offer purchase protection, which can be extremely valuable if you use your credit card to make large purchases. Each credit card company has different policies regarding purchase protection, but most cover the cost of replacement in case of theft or damage.
4. Take Advantage of Reward Programs – Many of today’s credit cards come with perks in the form of reward programs. From free airfare and free hotel stays to cash-back programs and discounted vacations, reward programs offer fabulous rewards for simply using your credit card for purchases.
5. Protect yourself in Case of an Emergency - A credit card can quickly become your best friend if you find yourself in an emergency situation without cash. A credit card may allow you to replace a broken furnace; it may allow you to purchase last-minute airfare; or it may enable you to have your car repaired. Whatever the reason, a credit card may prove to be extremely useful for those moments in your life when you need financial help.

How Will the New Credit Card Bill Affect Creditors and Consumers?

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The new sweeping regulations on credit card practices recently signed into law by President Obama has many credit card customers jumping for joy.

Learning from Past Mistakes

In past years, credit was flowing freely and creditors were more than anxious to lure consumers in with promises of teaser rates, gimmicks and reward programs. Many of us took the bait and began charging to our heart’s content.

Fast forward to 2009 and things don’t look quite so rosy anymore. Many of us now find ourselves in quite a precarious position; the economy is in a recession and our credit card debt is piling high as creditors dramatically raise our interest rates and add over-the-top fees. Not only are many of us unable to pay down our credit cards, but some of us are simply unable to keep up with the payments and fees.

New Changes Underway

The new credit card bill, which is due to go into effect July 1, 2010, is designed to come to the rescue of the millions of Americans bogged down in credit card debt and unable to get out from under it. But will this new law affect the way creditors lend out money?

Perhaps. We may see fewer promotional rates, fewer rewards programs, higher interest rates and tougher credit criteria, particularly for those with a short credit history. But in the end, credit card companies are still a business, and for those of who have worked hard to maintain our credit, credit will still be available. In fact, competition among creditors will still exist, thereby providing consumers with excellent credit plenty of options regarding credit cards.

In addition, the new law requires that credit card companies must provide cardholders with notice of a rate or fee increase at least 45 days ahead of time, thereby enabling consumers to make a change, if desired.

The bottom line is that the new credit card laws will put the responsible credit card consumer back into the driver’s seat, and will prohibit credit card companies from imposing certain practices that will only leave credit card customers in a no-win situation.

How to Use Reward Credit Cards to your Advantage

Credit Card Rewards

There are loads of different types of credit cards available to consumers today, and many come with excellent reward programs.

If you are interested in a reward credit card, then you should start by considering your wants and needs. A frequent business traveler, for example, may find that a rewards credit card with hotel points may be the ideal card to have, as the rewards program could result in free hotel stays and other perks.

On the other hand, a credit card that offers a cash back program may appeal to an individual who uses his or her credit card on a frequent basis and will likely earn cash back points.

From airline and hotel points to cash back and gift reward programs, there are plenty of reward credit cards from which to choose.

Points to remember when using a reward credit card:

• Read the details of the consumer agreement carefully, and make sure you understand the terms of the reward program. If you have any questions, contact the credit card company to clarify the card’s terms and conditions before accepting the credit card offer.
• Check your points frequently to make sure there are no discrepancies between your records and the credit card’s records. Many credit card companies offer online accounts which allow you to easily check your credit card point information at any time.
• Use your credit card for everyday purchases to quickly rack up credit card points. Remember: the more you use your credit card, the quicker you will see your rewards points accumulate.

It is important, however, to always make sure you have the cash to back up your purchases, as you will want to be able to pay off your balance in full every month to avoid costly finance charges.

• Make it a priority to pay your account on time every month, as many credit card companies will take away any earned points (and will likely increase your interest rate) if you are tardy on payments.
• If you find that you are not using your credit card enough to earn significant reward points, you may want to consider switching to a no-frills credit card, as the interest rate will likely be more competitive.