How to Find Out Which Business Credit Card is Best for You
Joshua Davidson wrote this article
You are reading a guest blog post by Fundera.
If you’re like most small businesses owners, you probably get a slew of business credit card offers in the mail each week.
The good news is you have plenty of card issuers looking to give you a line of credit. The bad news is, how the heck do you choose from all the options?
All the major card issuers have multiple options for small businesses, and some local banks and credit unions also offer business credit cards.
So what do you do?
Well, you can randomly select a card offer from your pile of junk mail, or sift through the 229 million results Google returns for a “best business credit cards” search. But I suspect you have a life, so I’ll make it a bit easier for you.
When it comes to business credit cards, one size does not fit all. Your business has specific needs and practices, so you need a card that best suits you. Here are some things to consider when looking for a business credit card.
CREDIT CARD OR CHARGE CARD?
One of the first choices you need to make is whether you should get a business credit card or charge card.
The two types of cards are similar in that they both extend a line of credit to your business and have common fees and rewards.
So what’s the difference?
Well, with charge cards you don’t have preset spending limits. But don’t go crazy on spending, you must pay your balance in full every month.
If you don’t want to worry about a credit limit, and you’re confident you will always pay your balance each month, then a charge card might be for you.
But if you prefer the flexibility of rolling a balance from month to month, go with a credit card. Just remember that you’ll accrue interest, and you don’t want that to get out of control.
REWARDS AND PERKS
One of the main differentiators among cards is their rewards. Pretty much every card, whether it’s a credit or charge card, offers some type of rewards program, you just have to do your research to see which one would benefit your business the most.
Do you travel frequently? Look for cards that offer discounts on flights, hotels, or car rentals.
Does your business make a lot of deliveries? Check out cards with gas bonuses. There’s likely a card that will help you save money in some business operation.
Make sure you research the requirements to obtain and use the various perks so you’re getting the best card for your business.
COST AND FEES
Look at the various fees a card charges to see what fits your business. Plenty of cards offer no annual fee, but that doesn’t necessarily mean it’s the right card for you. If a business card or charge card has extraordinary incentives, then the fee may be worth it.
Also, pay attention to other fees that may affect your business dealings. For example, if you do a lot of international business, you don’t want to be saddled with a high foreign transaction fee.
COMMONLY ACCEPTED CARDS
Before you sign up for a particular card, make sure your suppliers and vendors accept the card. Though Visa, MasterCard, American Express, and Discover are the most common card issuers, not every company accepts payment from every card.
Think about where you will use the card the most and find out what cards those places accept.
Many business owners fail to consider whether a credit card company reports data to a business credit reporting agency or a consumer credit agency.
Getting a business credit or charge card is an important step in helping your business’ purchasing power and building its credit history. If you’re a startup, you can take advantage of high credit limits—or no credit limits with charge cards—for short-term funding of your enterprise.
Hopefully, the above considerations help you navigate through the sea of card offers out there so you can decide which one is best for you.
About the writer of this guest blog post: Meredith Wood is the Head of Content and Editor-in-Chief at Fundera, an online marketplace for small business loans. Prior to Fundera, Meredith was the CCO at Funding Gates. Meredith manages columns on Inc, Entrepreneur, HuffPo and more, and her advice can be seen on Yahoo!, Daily Worth, Fox Business, Amex OPEN, Intuit, the SBA and many more.
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