Look At The Interest Rate



One of the most important issues is the annual percentage rate (APR). This is the interest that lenders charged on any outstanding debt. The APR varies considerably between lenders, so it is worth shopping around for one that you find acceptable. You should also pay attention to the interest rate for cash withdrawals. As with personal credit cards, the APR on cash withdrawals can be very high. This is worth considering if you intend to use your business credit card to withdraw cash.

Check Out The Fees

Some business credit cards charge annual fees. These can range from around ?20 to as much as ?75. However, there are still some business credit cards that do not have a fee, so it is worth considering these if the other factors meet your requirements. Another fee to consider is the application fee. It may be worth searching for a credit card provider who will waive this fee.

The amount of credit you will get and the repayment period are crucial aspects for managing your business. You'll want to get as long a grace period (interest-free period) as possible.

Business Or Personal?

Like personal credit cards, some business credit cards also offer rewards. These can be points that can be applied to purchases or useful rewards such as air miles or travel points of some sort. However, the range of rewards for personal credit cards is far greater.

Some business owners may be tempted to manage their business spending via a personal credit card, but this is best avoided for three reasons. First, the credit limit given will not match the kind of credit limit a business credit card might get. Second, the interest rates and repayment periods on business credit cards are designed to help with business cash flow. Third, if you find yourself in debt, any spending on a personal credit card is your personal liability. In comparison, spending on a business credit card is charged to the business rather than an individual.

Credit Or Charge?

Business owners also have other options for managing their finances. Some can choose debit cards. This will mean that there is no line of credit and business owners can only spend what is in the business account.

Another option is a business charge card. Like a credit card, there is often a fee for having a charge card, but there is no APR and no minimum repayment. This is because any spending on the charge card must be repaid in full at the end of the pay period.

Whichever option business owners go for, there are a number of good reasons to use a card for managing business expenses. This can be especially useful for businesses with a lot of employees as they can use a business credit card to track expenses and cut down on in-house accountancy.