Tips to Use Small Business Credit Card

Tips to Use Small Business Credit Card

Tips to Use Small Business Credit Card - How to Use Small Business Credit Card - Small Business Credit Card - Several Types of Credit Cards | Tips on - Find TipsSmall businesses are gradually relying on credit cards for making various payments. Credit card companies are offering several types of credit cards specifically designed for small businesses. However, small business credit cards, similar to ordinary credit cards have their share of pros and cons. Therefore, before picking up a business credit card, you should compare different cards, to realize which credit card is best suited to your needs.

Interest Rate

Most businesses face monthly and seasonal variations in revenue. A financial slowdown can further slow down your earnings. Therefore, to handle your credit card balances, fixed annual interest rates are preferable to floating interest rates. Often we are lured to accept business credit cards that offer zero or minimal introductory interest rate.

However, at the end of the introductory period, the annual interest rate might jump to unexpected level. Instead of being lured by the initial lucrative offering, choose a card with a reasonable annual interest rate. Late payment penalties are often a major cause of mounting credit card debt. Always try to make your payment on time to avoid penalties.

Don’t borrow beyond your limit

Often small businesses view credit cards as easy source of finance. They often own and use several credit cards. The combined credit limit of all your credit cards may become unmanageable. Therefore, know your limits and accordingly utilize your credit cards. Mounting debts will only worsen your financial position.

Separate personal and business spending

Your business credit card should be used only to meet your business expenses. Mixing personal and business spending will make your debt unmanageable.

Foreign exchange fees

Sometimes, credit card companies charge foreign exchange fees for overseas transactions. The foreign exchange fees charged on business credit cards are sometimes higher than that charged on ordinary consumer credit cards. However, there are some credit cards, which waive off foreign transaction fees. Therefore, before selecting a credit card, check the amount of foreign exchange fee that you will be charged for imports.

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