Business credit cards are not much different than normal credit cards. The key difference is that business credit cards are issued in the name of limited company or sole trader. The primary use of these credit cards is to facilitate staff expenditure, cash flow assistance, or carrying out temporary finance tasks.
How do these credit cards work?
Similar to conventional credit cards, business credit cards also have a limit to which you can spend and borrowers have to pay a minimum amount every month, and interest is applicable on repayment out of interest free period.
Additionally, you can ask for as many cards as you want depending on the strength of your staff.
Needless to say that your firm’s credit score decides the acceptance rate of your application. The best deals are reserved for firms with the best credit scores.
Note that your personal credit score can also be checked by your lender and it can affect the result of your application.
What are the different types of credit cards?
There are so many different types of business credit cards available as well. Every card has different perks and interest rates.
For example, there are cards with interest-free periods on purchases, which serve as great tools to better manage the cash flow when short on money. Cashback and reward cards are ideal for regular expenditure.
Cashback deals and 0% interest deal only work only till you make all the payment in full and on time. Other incentives are travel insurance for free, purchase protection and facility to add additional card holders for free.
What benefits do business credit cards have?
Business credit cards are convenient for paying for goods or services ordered over the phone or online. Another convenience is that your staff does not need to fill expenses form every time they make a purchase.
You can use the statements to monitor your expenses and then even specify distinct credit limits for every employee. Handing credit cards to employees establishes trust between the company and them. This is great as long as the employees don’t abuse it.
If business credit cards are used properly then your firm’s credit score will definitely get a boost. You will get longer access to interest free periods.
How to find the best business creditcards?
As it is with any product, it is highly important to compare all the possible business credit cards out there before you make any decision.
You first need to examine your spending behavior. If your firm spends regularly and want to save some money out of it then you should go for the cashback or rewards credit card.
If your firm needs some credit and some time to repay the debt then you should go for 0% interest credit card which will fetch you a year or two to repay the credit without interest.
Other credit cards are also there with different features. You should make a wise decision and take help of online comparison tools for deciding the most suitable card for your business.