Using a business credit card can be a huge convenience for small business owners when used wisely and responsibly. Business credit cards are a source of quick capital and provide an easy way of tracking business expenses. While business credit cards do have many advantages, there are disadvantages to consider before applying for one. Here is a look at the pros and cons of business credit cards.
Pros
It’s much easier to qualify for a business credit card than a bank loan. With average personal credit or a well-established small business, most credit card companies will be happy to approve a card for your business use. This will allow you to access cash on the spot if ever caught between a rock and a hard place. It can also be used in the case for cash flow problems, or the immediate need for supplies and equipment.
Most all credit card companies offer incentives and rewards for using their card. For making business related purchases on the card you can earn cash back, airline miles and other rewards.
Last but not least, when used responsibly, you can improve and build your business credit with a card
Cons
You have to qualify for business credit cards just as you would for a personal credit card. So, if you’re having or have had personal credit issues, be extra careful. Not only do many cards require a personal guarantee, but, down the road when credit companies report on your business activity it will affect your personal credit.
Business credit cards can be an expensive way to finance your small business purchases. Interest rates are high and you can be severely penalized for late payments. Even during the first year of opening the card the annual fee is waived, every year thereafter, you will most likely pay a high annual fee just to have the card.
Read the fine print. Business credit cards do not have the same purchase protection as a personal credit card. This can cause more difficulties returning purchases, correcting any billing errors or reversing fraudulent charges. This leads us into security concerns with business credit cards. You must keep your card safe, especially when making online purchases. Monitor your card carefully and be selective about which employees you give access to these cards.
American Finasco has several options to reduce your commercial credit card debt. With our help, our clients are able to stay focused on their business. We provide strategies and take the pressure off business owners who are having a hard time managing their debt. The first step is a phone call to American Finasco. We provide our clients effective solutions for business debt relief. Contact us today to get your business on the right track! Visit www.americanfinasco.com and complete our Online Form for a free consultation or call (800) 299-2909. We look forward to speaking with you.