Business Credit Cards
Business credit cards are seen as a great way to run or even start up a business. The concept of Business credit cards is one that is relatively new in the market after the current economic downturn. Due to a number of changes in the policy of how business credit card can be used, there has been a lot of speculation and concerns over a number of issues about which we are going to take a closer look at.
1. Is owning a large business compulsory to be eligible for such a card?
When business credit cards came in to the market, they were initially only allowed to be used by those companies that fall under the “large” category. It was said that only large companies with a decent turnover would be able to make effective use of such a service. Seeing as the current credit crunch bought all businesses to a halt, the government was required to bring in some form of policy that would get the economy flowing once again. This is where it was made certain that even smaller companies including home businesses and entrepreneurs will be able to qualify and make effective use of such cards.
2. How much of an importance does your credit history play?
Even though the business credit cards are known to be offered to all types of business, they will still be required to show a good credit scoring. For businesses that have been in the market for quite some time, this will be based on their business’ credit history. However, since new businesses would not have any records to showing their credit history, in such a case the individual’s personal credit history is taken into consideration. For this reason, it is recommended to have a look at your credit score history before you decide to apply for such a card. Most of the well known banks that do offer business credit cards need your credit rating to be in the “excellent” category.
3. What if you have a bad credit history?
It is common to expect that not every person in the United States would have an excellent credit history. To be quite honest, a recent survey showed that only 35% of all businesses are known to fall under that category. So what does that mean? Does it mean that those with a poorer credit history cannot make use of business credit cards? No, they still can. If you are a business which has a poor credit rating, there is one other alternative. This is usually referred to as a secured or prepaid business credit card. In such a case, you will be required to leave a large deposit or secure an asset against your credit card. This allows the bank issuing the card to use the money in the event that you are unable to make the payments.
The great thing about secured business credit cards is that it can help build your credit history. For those who have a poor credit history, this would be seen as an ideal option. Knowing that you would have a deposit settlement with your credit card will in effect help increase your credit rating.
4. Are they worth it?
To be quite honest, in the current economic situation, business credit cards are probably the best way in which you can go about starting up an effective business. In comparison to loans, they would work out to be much cheaper and the process of obtaining one would also be much easier.
5. Where to look for Business Credit Cards
There are a number of online websites that are offering business credit cards, but you want to make sure you opt for an offer that is both trustworthy and reliable.
- Business Credit Cards
- Canadian Business Credit Cards
- Australian Business Credit Cards
- UK Business Credit Cards
We do recommend looking at Wikipedia for more information on the topic. This will help make it easier when deciding which credit card to choose.