Establish Small Business Credit

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Establish Small Business Credit - By: Cristina Angueta, Posted on: 2008-05-16

If you're contemplating of starting a small business or already have one it would be a bright idea to apply for a small business credit card. There are alot of advantages to paying your business expenses with a credit card. A dedicated business credit card is a indespensible tool for handling the operating expenses of your small business.

But just like with any other type of credit card ie. personal, there's good and there's bad. The good is definatly the heavier side of the scale. With all the compitition out there do your homework. Find a card that benefits your company's dynamics. Weigh out the terms, conditions, benefits, rewards and competitive fees. The right card gives you an easy way to make purchases for your business.

Compare big national banks and smaller local banks. Much of the action in credit cards is through big national banks, such as Citibank and Bank of America, which act as issuers of major credit cards. But smaller regional banks and some local banks also issue cards. When looking for a bank-issued card, a good place to start is with the bank that holds your business accounts. Banks like to provide multiple services to clients and may have special offers on credit cards if you do other business services with them.

One of the benefits of having a small business credit card are the statements they generate. It allows for one to easily stay on top of tracking expense data and help for managing your business finances. Many small business credit cards offer free online reporting. The business owner can pay their credit card bill, monitor business expenses instantaneously, and go over statement charges anytime online. Most cards can also classify the charges by business-related categories on a quarterly and year-end summary statement. This is very useful for the small business owner in preparing the company tax return as well as having a great snap shot view of seeing where and how the company is spending its money. If you deside to give cards out to your employees, this would be an essential way to keep track of their charges. Just make sure you set a limit on their cards to avoid headaches down the road.

Card issuers offer an wide range of credit and debit cards designed especially for small businesses. If you already own or plan to start a business, you probably get offers regularly in the mail. The competition for your credit card business means better deals for you. Small business credit cards tend to offer better interest rates and have fewer annual fees compared to individual cards. The reasoning behind this is that businesses tend to have a more reliable payment history. Due to this, credit card companies offer lower interest rates and with the compitition among them fierce some have no choice but to lower or even better... eliminate annual fees all together just to keep up in the rat-race. Many cards offer very attractive reward programs. Such as cash-back incentives, airplane miles, gifts, and complimentary services. Some cards also offer savings from specific retailers simply by using the credit card to make the purchase. Why not pay all business expenses with a credit card and take advantage of these free rewards? Some cards give the cardholder free membership into various airline clubs. This comes in handy for the traveling businessman. Airline clubs give the cardholder a sweet private club atmosphere in nearly every airport that offer free wireless internet access, phone services, food and beverage, and a quiet place to relax. Check out the offers from companies you do business with. Businesses that provide goods or services sometimes also offer small business credit cards that include a bonus, such as discounts or cash back on purchases. If you do a lot of business with one particular company, for instance an office supply store, and that company offers a credit card, you might benefit by getting one.

When it comes to business expenses, credit cards offer the same protection as for the individual consumer. This is an often-overlooked advantage of having a small business credit card. Paying with a business credit card for business expenses gives the business owner protection against fraudulent charges and, in many cases, an extended warranty over and above the manufacturer's normal warranty. Also, in the event you pay for something where there is fraud involved, the credit card company will protect you and reverse these charges, putting the burden of proof on the vendor.

Now let's talk about the bad. Basically, this small business credit card will be treated like any other credit card. You, the person that signs the application, will be held accountable. Meaning any delinquencies will be noted on your personal credit reports. A few late payments could seriously damage your personal credit score, while a big debt run-up by the business could make you look more overextended than you really are, regardless of the payment history.

With this information at hand you should have no problem researching small business credit card companies. Lot's of luck to you and much success.

Article Source: http://www.girlarticles.com

Article by Cristina Angueta. Visit us at www.factsoncreditcards.com for more info.