Pointers on Applying For a Business Credit Card

Business owners are all faced with financial challenges. The need for financial assistance isn’t just for new, start-up businesses, or even long time businesses and large corporations seek business funding assistance at one point or another. Today, banks and financial institutions offer more than one way of providing financial help.

Business credit cards are now popularly used in the business industry. Many business owners prefer to obtain business credit cards because they are easier to get approved for and offer flexibility and convenience. Are you a business owner? Have you thought about getting a business credit card yourself? If so, this article will give you some tips on how to apply for a business credit card and get approved without hassle.

Instant Business Credit Cards- How To Get One

Explore your options. Our first tip is for you to get to know our options. The market offers a variety of business credit cards from different companies and each of them promises to give you the world. Nevertheless, it is your responsibility to evaluate each business credit card, compare one from the other, and weigh your options before choosing the one that best matches the needs of your business. Check out online credit card review sites so you can get an idea of the best or the leading business credit cards in the market. Find out what others have to say about each business credit card.

Compare rates, costs and terms. After doing some research, you may have narrowed down your choices to just a few. It’s time to analyze each business credit card more closely. How to do this? Read the fine print. Spend time in reading the complete Terms and Conditions found at the business credit card’s official website. Check how much the interest rate is but don’t forget to examine the other fees associated with your card as well. More importantly, understand the conditions of your business credit card issuer. Doing your comparison can take time, but it is definitely worth the effort.

Complete your application

Finally, once you’ve decided on which business credit card you want, you can start filling out your online credit card application form. See to it that all information you’ll enter is accurate and correct. Pay special attention to the crucial details such as the type of your business, your gross income, the number of your employees, and other information about your business. Usually, you can receive a response to your application within just a few minutes. However, it can take about 5-7 banking days before you receive your business credit card.

Check your credit history. If you’ve just started with the business and have yet established your business credit history, your personal credit history will be used for approval. Therefore, it’s a good idea to check your credit report before submitting your business credit card application. An excellent credit rating can pretty much guarantee an instant approval of your application. If you have poor credit history, you may choose to work on improving your credit score first or you may also look into applying for a secured business credit cards instead.

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Compare and Contrast – Taking Advantage of Business Credit Card Offers

The usual plethora of credit card offers that flood the advertising schedules has been noticeable by its absence this year, as credit card companies worry about continued exposure to potential ‘bad debt’ from consumers. But business credit cards are a different category, and something that many small and medium size businesses rely on to get them through lean months. Many SMEs utilise business credit cards as part of their financial organisation, and the Federation for Small Businesses is calling for a cap on credit charges to help struggling businesses this year.

“A cap on interest rates will at a stroke not only reduce business costs but give consumers a real boost and cut the cost of borrowing,” says FSB national chairman John Wright. He believes that small and medium size businesses will play a pivotal role in driving the UK economy out of recession and onto the road to recovery, but the interest rate charged on many business cards could scupper some businesses chances of being part of that recovery. According to the latest FSB figures, 23% of entrepreneurs use a business credit card to finance their business, but a worrying 26% use personal credit cards instead. This could cause a business problems in the long term, as it becomes difficult to separate business from personal expenses and exposes the cardholder to personal liability of the debts of the business and a potentially poor personal credit rating.

So perhaps this is the ideal time to start looking at business credit card transfers in much the same way as personal credit card transfer options. A business credit card works in a similar way to a personal card, giving the card holder a period of interest free credit, flexible payments and a much easier accounting system, with purchases and expenditure being listed on one, detailed statement instead of a disorganised wad of receipts. Like personal cards, business credit card suppliers are also anxious to tempt new customers with balance transfer offers, providing customers with the same options to ‘card jump’ as personal credit card holders. For a business this may help cash flow in lean months, particularly in the traditionally slow business months of January and February.

An alternative to the business credit card is the business charge card, which offers the same amount of convenience and flexibility as a credit card. However, with a charge card the balance often has to be paid in full at the end of the month by direct debit, so a charge card can offer a short-term solution to cash flow issues at best. It also has to be remembered that business credit cards often have an annual fee attached (sometimes hundreds of pounds) so this amount has to be taken into consideration when comparing and contrasting the cards on offer.

January is the ideal time to look at transferring to a new business credit card to take advantage of attractive offers that may not be repeated later in the year. It is also the time when many businesses are sitting down to take stock of their financial position and prospects for the remainder of the year, and so is an opportunity to examine the business credit card deals on offer. The competition between business card providers is fierce, with many including ‘reward schemes’ and other tempting sweeteners to get businesses to swap allegiances. The benefits of business credit cards are obvious – they allow the business to have a separate ‘slush fund’ of financing that can be easily controlled and monitored, no matter how many card holders are using the account. Business credit cards also give SMEs in particular another valuable commodity – time. Time not only to balance money in and money out (ensuring suppliers are paid on time and maintaining other lines of credit), but time saved on accounting and administration.

“2009 must be a year of action for small businesses,” says John Wright of the FSB. “The Chancellor and the Government can and must take a very serious look at capping interest rates charged on credit cards,” he adds. If the credit companies take notice of this then credit card charges could stabilise, leaving businesses in a much stronger position to be able to ride out the recession. It could also lead to a greater flexibility in credit lending for SMEs and avoid the knee-jerk reactions of the banks and credit providers seen in previous downturns. All of this means that now is the ideal time to look at business credit cards transfers to take advantage of the best deals, while they’re still on offer.

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Do You Need a Business Credit Card?

Even if your business is small sized, you must have wondered at some point in your business career if you need a business credit card. Well, to answer that question, let us look at the advantages of subscribing to one and how it may help your business.

Legitimacy & Credibility

The first and foremost change you would bring about by getting a business credit card is that of perception. Your customers, business associates, employees and even you, the owner will begin to perceive your business as a legitimate organization with credibility. With this you would have automatically distinguished your business from your competitors and most likely, moved your company up to the next level.

Easier Bookkeeping

Most people dread reconciling the accounts. However, the day-to-day operations of your organization can be made a whole lot manageable with a business credit card. Your expenditure on purchases, operation and office necessities can be made with the card. There is no need to fork out any cash. The best part is that you can keep track of every expense with the management reports that are provided with the card. These reports even include itemised listings of purchases. Now, that makes bookkeeping seem like a breeze, doesn’t it?

Separate from Personal Expense

Business credit cards are issued in the name of the company and not yours. This allows you to keep your personal and business accounts separate. Furthermore, the debts of your company become the responsibility of the business and not you.

Note of caution: If yours is a new business, the business credit card may be issued based on your personal credit history. You may even have to sign a personal-liability agreement. This is not recommended (but mostly unavoidable for new businesses) because if you run into any problems with payment, your personal credit history may be severely affected although the expenses were not personal but for your business. In order to establish a distinct business credit history, you may want to register your company with a business credit bureau as soon as possible. This allows you to eventually give up your personal-liability agreement.

Benefits to Key Employees

It is inevitable, sometimes, for employees to have to shell out their own money to cover purchases made for the company. This practice, albeit common, is not fair to them. Providing your key employees with a business credit card will eliminate this practice and make the running of your company smoother and more efficient.

Note of caution: Although business credit cards prove to be advantageous, there is a real danger of employees being dishonest and misusing the business credit cards. Be vigilant and keep track of any spending on the business credit cards using the management reports. If you discover any instance of fraud, report it immediately.

Spending Limits

This feature is usually considered a plus. It helps keep your business expenses in check and prevents the danger of getting into debt. There are usually limitations on purchases as well as withdrawals from ATM. These limits are also applied to the business credit cards that you may issue to your employees.

Savings & Safety

By paying for your expense only once a month, you would effectively be stretching your company’s dollars further. Moreover, as long as you pay within the grace period (please do this religiously), you will not have to pay any interest on the amount that you had borrowed from the credit card company.
Using business credit cards is usually cheaper than using cheques.
With business credit cards, you can make online purchases or orders which are usually more economical as compared to buying in stores.
You can also avoid carrying around large amounts of cash when making purchases or paying for the operations of your company.

Perks & Rewards

Business credit cards are often complemented with perks and rewards such as flying miles and discounted hotel stays. Compare these perks and select a card that suits your particular business needs. Choosing the right set of perks and rewards may help you save on your business operation costs.

Business credit cards can prove to be an asset as long as you use them wisely and carefully. Compare the offers available thoroughly. Watch out for any hidden costs and read the fine print in your contracts circumspectly. Do not be swayed by the attractive perks. Compare the perks as well as the rates, customer service, terms and solutions conscientiously and you’ll probably save yourself a lot of money.

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What’s Up With Prepaid Business Credit Cards?

What are prepaid business credit cards and what types of benefits can they afford you? Credit cards have become a part of daily life for businesses and establishing credit for a new small business has become vital. Unfortunately, not everyone who starts up a new business has a sufficient personal credit history to qualify for a mainstream business credit card with a significant credit line. Prepaid credit can be the answer. Keep in mind that there are both benefits and drawbacks associated with the idea of prepaid cards. If you want to make the best decisions regarding this type of card, then you’ll have to shop around so that you can make an informed decision. But prepaid cards are capable of helping you to build up credit without putting you at risk of falling further into debt, or hurting your credit rating even further.

So what are prepaid cards? Prepaid cards are essentially like any other type of card as they are backed by the traditional companies except that they are completely controlled by the card user rather than by the credit company. The account for the prepaid card is opened with the help of a deposit from the cardholder which then becomes the limit. Whenever the cardholder would like to have more “credit,” they simply make an additional deposit. With a prepaid card, you must keep clear records of your deposits and expenditures because if you have a prepaid card and you try to spend more than you have deposited to the card, your purchase will be denied. In other words, prepaid credit cards, including prepaid business credit cards, operate a lot like gift cards in that you can only spend the limit on the card and nothing more. This makes these a prepaid credit cards an excellent option for individuals and businesses that are looking to build more credit.

There are numerous advantages associated with prepaid credit which differ somewhat from the advantages of traditional business credit cards. For example, in some ways prepaid business credit cards are more advantageous because it isn’t possible to go into debt when using a prepaid card for your business, primarily because your ability to spend is limited by the balance on the card and how much has been deposited into it. Another advantage of prepaid business cards is that there are no interest charges and you can use these prepaid cards absolutely anywhere that traditional business cards are accepted. Finally, prepaid credit make it possible for you to build credit because the majority of the companies offering them report the payments that you make to the credit bureaus.

Because they offer the same convenience as a traditional business card without any of the worry, a prepaid business card might be the answer if you are starting a business and have less than stellar credit. All you have to do is shop around to find the one that works best for your business and apply online. Good luck!

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How to Get a Business Credit Card With No Credit History

Having a credit card purposely for your business is very useful but getting a business credit card with no credit history can at times be of a little challenge. Almost every successful small business owner would attest to the importance of keeping family and personal finances separate from the business’ finances.

It is important not to mix purchases made for the business with those of the family or for yourself. This is the reason why it is important to get a business credit card that will be used solely for making purchases meant for the business’ daily operations.

So why is that most small business or family business owners find it a lot more difficult to obtain credit card financing? The reason is quite simple indeed. When a bank for instance loans you or your business money in the form of a credit card, they must be sure that you can pay back the money, with any interests that accrue.

And the only way they can make this decision correctly is from your credit score or rating. Now most small business owners do not have a credit history for their business. So it becomes difficult for lenders to approve a credit card in the name of your business. However, it does not mean you cannot get a business credit for your business – it is just a little more difficult. So follow these 4 steps to get a card for your business approved quickly and start building an excellent credit rating for your business.

1. Start from the local bank or credit union

Go to the local bank or credit union where your business has an account at. Most small banks are willing to offer a business credit card to new businesses that have accounts with them, albeit without a credit history. If they approve the card for you, it is an excellent opportunity you can build on and get a good credit rating for your business. After that it will be a lot easier to get any card you want for your business.

2. What if the first option fails?

If it does not work out with the banks or credit union, you can turn to large online or e-commerce retailers such as PayPal or Amazon. If for instance you have a PayPal merchant account, you can apply for a card from them that will help you manage your business’ finances well. So if this applies to you, consider making an application with them and see if it will be approved.

3. What about a secured credit card?

A secured credit card, registered in your business’ name may your next and best option about getting a card for your business. Most banks will give you this card if you have a savings or checking account with them. You simply deposit money into the account. The bank will then give you a card secured on the account.

Every purchase you make will come straight from the checking account. But the card has every feature and capability you would otherwise expect to have on a regular unsecured card. This way, like we stated in earlier, the bank is able to monitor your credit behavior or how you run the business’ finances. If over a period of 9 months, the bank feels your credit behavior is satisfactory, they may upgrade it to a normal credit card.

This is one of the best ways many business owners have been able to get a credit card for their businesses and have built excellent credit ratings for their businesses, and you can do same.

4. This is important and closely related to step 3 above. Ensure that any card you secure for your business is reported to the credit reference bureaus under your business name. Some credit card firms do not report secured business credit cards. And if it is not reported, you cannot build the good credit rating you need. This way you can begin to build a credit history for your business.

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