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Business Credit Cards Vs. Personal Credit Card – a Look at the Pros and Cons

admin — Sat, 19 Dec 2009 04:30:16 +0000

Pros and Cons of Business Credit Cards and Personal Credit Cards

In recent years, Americans have readily embraced the practice of ecommerce and cashless transactions. The advent of Paypal, Click2Pay and almost every kind of credit card imaginable has made paper money almost irrelevant.

Cash, in fact, has become the exception rather than the norm. Very rarely do you see people with thick stacks of money inside their pockets, and if you do, it most often is a cause for alarm. In fact, store clerks and tellers have been trained to alert authorities whenever they encounter customers who pay for expensive purchases with cash. But I digress. Going back to the subject of credit cards – that wondrous contraption which allows you to shop with just one easy swipe – its widespread popularity has prompted banks to make this work to the advantage of business owners or the corporate industry.

And why not? Considering the countless financial transactions that a small to medium business makes, running out of petty cash for major or secondary supplies procurement, bills payments, or a host of other business expenses is a common experience. A good number of these entrepreneurs have initially tried using their personal credit cards to cover these expenses, but more and more have been shifting to business credit cards for different reasons.

Would You Choose a Personal or Business Credit Card?

What sets a personal credit card apart from a business credit card, and why is one being compared to the other?

In terms of credit limit, personal credit cards have a lower credit line, while the latter can have a credit limit of up to $50,000. Also, a month-end repayment is compulsory for a personal card, while a business credit card allows you to pay just a smaller minimum amount.

In both cases however, interest rates increase for the remaining unpaid amount which is added onto next month’s card bill.

Let’s Weigh the Advantages

A business credit card, when simply used for important business transactions, can offer a wealth of advantages that would benefit the whole company.

First of all, business transactions of all sorts can arise anytime, and in times like these, the business credit card is the answer to every businessman’s prayers.

A business credit card can help a company overcome challenging financial trials. This paves an easier way to facilitate expansion.

Personal credit cards and business credit cards must be distinguished from another by more features. Business credit cards are much stricter in conducting character reference tests – and require a host of other relevant documentation to be submitted before the actual application processing occurs.

What will happen if you both you use your personal and business credit cards? Simple, you have just made yourself credit card payment overload bait. Unless otherwise specified, you may find telemarketers calling you for different debt consolidation or debt settlement contracts. Worse, you may actually run across some who carry the same Hershey’s Kisses wrappers you have been holding onto for so long.

By: Klye Anderson

Using Business Credit Cards in Business Solutions

admin — Fri, 30 Oct 2009 22:33:38 +0000

If you haven’t yet recognized the benefits of owning a business credit card, it’s definitely a matter worth your consideration. Aside from enabling you to separate your business finances from your personal money, business cards offer more advantages. Let’s take a closer look at some of them.

Build your credit.

As soon as you’ve applied for a corporate credit, it’s best to start building up your credit history with the help of a business credit card. You be already aware of the importance of having a corporate credit. A solid and excellent business credit prepares your business for its future growth and expansion. How can business credit cards help you build a solid credit history?

By using your business card for your expenses and paying off your balances on time, you are showing your worth as a borrower. Aside from timely payments, staying within your credit limit is just as important. Financial experts recommend using only 30% to 40% of your given credit limit but not more than 50% of your credit as this could send a negative impression on lenders.

Monitor your business expenses.

A business card can also help you in keeping track of your business expenses. Take advantage of the online account access that most business card issuers provide. This feature allows you to check on your account at any time without even leaving your office or desk. For a manager who handles a hectic schedule and so many tasks, this is a very valuable option.

You can also use your monthly billing statements as well as your quarterly and yearly account summaries as detailed references to your accounting. When it’s time to file your business taxes, these documents can also prove to be indispensable in determining which of your past purchases can be deducted from your taxes.

Get rewarded for your spending.

Some credit cards for business offer reward programs that can help you save more from your expenses. The basic reward programs for business credit cards are the Frequent Flyer Miles, Gas Rewards and Cash Back Rewards. You can choose a reward card that gives the incentives that complements the nature of your business.

For example, if your business is into a lot of traveling, you can certainly get more benefits from a Frequent Flyer Miles Business Card. On the other hand, if you own a fleet of vehicles that you use in your business operations, a gas reward business credit card may be your best choice. If you’re in a buy and sell business, you may want to consider getting a cash back reward business credit card instead.

Be prepared for unexpected expenses.

With the help of a business credit card, you are ready to take on unexpected expenses at any time. Did one of your customers place an unexpectedly large order at a time when you don’t have cash? You don’t have to refuse this particular customer just because you lack the resources. Instead, you can simply charge everything you need to your credit card so you can deliver this order on time.

Having the option to make purchases instantly and pay them off at a later time is certainly one of the best things about owning a business card. The important thing to remember is to always pay off your balances on time to avoid the risk of credit card debt.

By: Pamela Williams

Visa Business Credit Cards

admin — Fri, 09 Oct 2009 22:07:12 +0000

The Visa Business Credit Card is one of the most popular business credit cards serving the business market today. Recognizing that businesses appreciate the need for good cash management, Visa offers business credit cards designed to provide business people with purchasing convenience, cost savings, instant access to credit when they need it and complete, detailed reporting of all business expenses charged to their Visa business credit cards.

Visa business credit cards can be obtained from any one of the many issuers that are affiliated to Visa. The credit card packages are likely to vary from one issuer to the next, but there are certain features that are universally applicable to any business credit card issued under the Visa brand. These universal features, privileges and benefits, will typically include the following:

Auto Rental Collision Damage Waiver

All Visa business credit card holders are covered for damages due to collision or theft, at no added cost. This benefit reimburses you for the costs incurred to repair or replace covered losses on a hired vehicle that you paid for with your business credit card. The only condition is that the vehicle should have been exclusively used for business purposes. When you rent the vehicle on your eligible Visa business credit card, remember to decline if the rental company offers its own collision damage waiver. This will activate your Visa coverage. If the rental company is adamant and insists that you buy their policy, call your benefits administrator. In the case of theft or damage to the rented vehicle, you will first call the Visa benefits administrator before speaking to anybody else. He or she will then advise you how to proceed.

Purchase Security and Extended Protection

The purchase security benefit entitles the business credit card holder to replacement, repair or reimbursement for eligible personal property that you completely paid for with your Visa business credit card (up to $10,000 per claim and up to a total of $50,000 per business credit card holder). Extended protection doubles the original manufacturer’s warranty period. This period is capped at 12 months.

Gifts purchased for others on your business credit card are covered by this benefit. The only challenge is that you will be requested to file a claim, and that the intended recipient will be required to provide documents in substantiation of the claim. You must develop the habit of keeping your copies of the Visa business credit card receipts as well as the store receipts, since these will be required as supporting documents to any claim you may file.

There is a host of exclusions on the items or situations that are not covered by the Visa purchase security and extended protection business credit card benefits, so you should review these with care.

Travel Emergency Assistance

Visa business credit card holders are assured of 24-hour assistance from appropriate emergency services when these are required. The benefit covers you, your immediate family members and your business associates. This special service for business credit card holders provides contact assistance and referral. You will still be responsible for all costs and expenses incurred with the suppliers of these emergency services, which could include ambulances, doctors, hospitals and towing. The upside is that you can pay for these with your card as the vast majority of emergency services know and accept the Visa brand.

By: Richard Gilliland

Business Credit Cards Guide

admin — Thu, 01 Oct 2009 17:10:00 +0000

Business credit cards are a helping hand for those entrepreneurs who are running their own businesses. A business credit card not only acts as a line of credit but can also help to provide you enough control in managing your companys finances and cash. When business credit cards were first introduced it was mainly aimed towards corporate executives. However, this trend has changed and nowadays even small business owners can acquire business credit cards fairly easily. Business credit cards have become a versatile tool which allows business owners to utilize effectively over time as their business needs change.

A majority of the business credit cards come with a wide range of features including cash advances, cash rewards, airline miles, one-call emergency service, and insurance coverage. The features included in a business credit card vary from one card provider to the other, but most of the credit card companies offer an attractive introductory rate for the first few months from the date of opening your account. After that initial period the customer will be required to pay a higher ongoing APR and the card also might require an annual membership fee.

One of the major advantages of a business credit card is that it provides a significant increase in financial control. The cards allow you to simplify and manage your business expenses well, eliminating the need to use a personal credit card for business expenses. Another most important feature of a business credit card is that small business owners can make use of these little pieces of plastic to provide financing or emergency “bridge loans” for their business when stuck in cash flow shortages. And even thought it is not explicitly stated in the business card features, business owners have made use of business credit cards for start-up funding as well.

Nowadays, there are myriad small and medium sized companies which make use of business credit cards as an efficient financing tool. There is a wide variety of credit card issuers that offer business credit cards with various schemes and features. Because of the many opportunities available, it is highly recommended to thoroughly contrast and compare business credit cards to select the ideal card best suited to your specific business needs.

Tips for Choosing a Business Credit Card

Before you apply for a credit limit on a business credit, make an estimate of your monthly business expenses and your history of repayment. Make sure that you apply for a credit limit that you know is within the bounds of your expense limitations, but equally important, will also take into account the growing needs of your business.

If you have several employees working under you, you need to determine how many cards your business may need and which employees will require cards for business expenses. Obviously, before you issue cards to any employees make absolutely sure that they are trustworthy.

Also, make sure that during this process that you determine your business requirements for ancillary services. That is, if you or your employee has to travel regularly for business needs, then it is a good idea to find out those business credit card issuers who offer free air miles, travel insurance, and hotel discounts.

Be careful about the introductory interest rates offered by business credit card issuers. Most of these offers are designed to entice new customers and after an initial period of six months to one year, the interest rates will increase substantially. So when comparing business credit cards, one of the most important things to check is the regular interest rate versus the introductory APR and which card compares favorably in that regard.

So if you are planning to start a new business venture, try to utilize the entire suite of benefits that a business credit card offers that can fund, track and reward your business activities.

By: Robert Alan

Keep it Business, Not Personal

admin — Mon, 07 Sep 2009 16:17:02 +0000

Managing a small corporation, as well as having a home-based business myself, I have learned how important it is to keep personal and business matters separate. Not only does it make life less confusing, it can also save you money on your taxes.

The first thing I recommend is to open a separate checking account just for your business. Use this account to deposit all self-employment income. Do NOT use this account for wages received from an employer. This account needs to be totally separate. You will pay all your business related expenses solely from these funds. When you pay business expenses from your personal account, it is much more difficult to accurately track how much money you are spending for your business. And, missed expenses could mean missed tax deductions!

The other suggestion I have is to open a credit card specifically for your business expenses. Make sure you choose a card that suits you and your business well: i.e. cash back, travel rewards, etc. Use this card for all your business purchases and of course, make payments to it with your new business checking account. For more detailed benefits on a dedicated business credit card, I highly recommend reading Charles Clar’s article at http://creditcards.youngparentsmagazine.com/A-Dedicated-Credit-Card.htm

Last but not least, I recommend purchasing some form of accounting software. It doesn’t have to be anything fancy or expensive, just a place for you to enter your income and expenses for your business. Even a very simple program can provide you with financial reports demonstrating your company’s profitability, as well as help you to set a budget. Most programs also give you the option to print reports that aid in tax preparation.

As with any other financial decision, I highly recommend you meet with an accountant or tax preparer on an annual basis at the very least. He/She will be able to direct you in the best ways to make the most of your hard earned money. But remember, the harder you work at keeping your business and personal records separate, the easier it will be for your accountant to help you. Best of luck in your business.

By: Jennifer Tarzian

Instant Approval Business Credit Cards

admin — Sat, 22 Aug 2009 07:09:52 +0000

Instant approval business credit cards are available online from various credit cards providers. Business credit cards allow easy money management for your business, either small or corporate business. The detailed reporting of business credit cards allows you to manage your expenditures and track your financial position instantly. Your business also benefits from huge saving costs offered by different merchant establishments. With instant approval business credit cards you can apply now and receive the card as early as tomorrow.

Business credit cards usually do not have pre-set spending so you can use it with confidence. Most of them come with a relatively low or even 0% introductory APR. Other great offers are also available such as free frequent flier miles, coverage for vehicle rentals, emergency cash disbursements, points towards rewards from many major airlines, hotel properties, and stores. All of these could virtually help your business needs to stay on the top.

Account Management Made Easy with Business Credit Cards

You can keep a track of all your business expenses from the business credit card monthly report you receive every month. The reports are in detailed format that allow your accountants to streamline the record-keeping process. Credit cards companies also provide a business credit card program in that you will receive categorized purchases, in addition to itemized monthly statements, to allow you smartly monitor and track business expenses.

Business credit cards also let you make personal purchases. However, the reporting system of the card keeps separate account of your personal purchases. Moreover, with business credit cards with rewards, you can earn points and get rewards even on your business transactions.

Applying for Business Credit Cards

Business credit cards normally come with special merchant tie-ups. The participating merchant outlets offer huge discount and privileges on business supplies and services. You should look for a business credit card that has tie-ups with the merchants you are frequently dealing with.

Credit cards companies provide you a list of merchant outlets available countrywide and the different reword programs. As the merchants are spread countrywide, you never run out of privileged offers, even when on a business trip. This ensures every single purchase increases the profit margin of your business. As new merchants are added to your business credit card network, you receive an e-mail notification with detailed information about the offers from the merchant establishment.

By: Al Falaq Arsendatama

Small Businesses Don’t Need a Business Credit Card Do They?

admin — Wed, 19 Aug 2009 22:43:56 +0000

Many a small business owner won’t bother to get a credit card for his or her business. Why bother, after all? Checks work, and do you really want to risk getting a credit card for your business? Just one more thing to keep track of.

A business credit card is useful for just about any business. It’s good for your business to have a credit history in its own name. And there are other advantages as well.

Expense Tracking

Having a separate business credit card means you can more easily keep your personal and business expenses separate. This is great come tax time, when you need to be splitting out the deductible versus nondeductible items. It’s also just good bookkeeping.

Lots of Options

Just as with personal cards, a business credit card comes with plenty of options. You can find low rate cards, rewards cards and so forth. You can authorize various people to use the account, so that if you have a trusted employee, they can easily make business purchases without you having to reimburse them. It can make life much easier.

Easier Purchases

You know how much of a pain it can be going out to buy supplies for your business. If you don’t have a credit card, that means using your personal card, a check, or cash. None of these is as convenient as the business credit card, and they add to the challenge of keeping your books in order.

And just like any other credit card, if you really need to carry a balance you can. No need to ask the bank for a loan or carry the debt on your personal card. This allows you to keep the amount you are paying in interest due to your card separate from any interest you may pay on your personal credit.

There’s nothing like a credit card for smoothing out your cash flow as a small business. It can help to keep you from falling behind on bills, although you do not want to rely on debt to keep up with all your bills for too long. That’s just not healthy for individuals or for businesses. But for getting past short term cash flow issues, there are few easier ways.

Take the time to explore your options. A wisely used credit card can help your business grow more quickly and is a wonderful tool. Don’t skip it just because you don’t think you need credit for your business. Better to have the credit there for when you do, especially if it doesn’t cost you anything to have it there.

By: Stephanie Foster

New Business Credit Card

admin — Fri, 14 Aug 2009 08:10:00 +0000

If you have a new business and are thinking of the best ways to manage your money, then maybe you should consider getting a new business credit card for your company needs. If you have a credit card for your business, it makes money management and purchase monitoring so much easier for your accounting purposes. This may mean that you will have to make extra precautions on paying bills on time and choosing the right trustworthy employees to use them, but in the end the advantage will be that you will have better records.

Having a new business card has several advantages. First, itemization of expenses is done automatically by the credit card company which makes monitoring easy for you. Second, you can prevent mixing personal and business money by using the credit card for purely business expenses.

Third, this is a good way to manage the expenses of the business and to control the purchasing that your employees will do for you. Because of the transactions records that will come to your business regularly from the credit card company, expenses are easily traceable and accountable. Fourth, getting a business card will also help your business build up its credit history and credibility as an entity.

By creating and maintaining a good credit history for your company, you can be sure that banks will be more than willing to extend your business a good loan at low interest when that time approaches. Fifth, by availing of a company credit or store card, you can be guaranteed that many banks and companies will give you great deals and rewards whenever you use your card to purchase supplies and equipment.

By: Elija James

Obtaining Business Credit – A Simple Roadmap

admin — Thu, 06 Aug 2009 18:02:44 +0000

Obtaining the business credit to start a business or grow your existing business, even if your personal credit rating is less than perfect, is still possible even in these times of tight money. Securing business lines of credit will require some work on your part to get accepted when a lending institution reviews your credit application. Here are some tips to make this process easier for you.

Don’t use your personal credit cards to fund any of your your business expenses. Your personal credit score is of little value when you are establishing business credit lines. In many, you will not even have to provide your social security number. There is also the benefit of separating your personal liability from you business liability.

You do need to incorporate your business rather than acting as a sole proprietor. That means following the legal procedures necessary to have it listed as an LLC or other corporate enterprise. By doing this you can also save on your taxes. Once you have done this, obtain a credit card or cards in the name of the corporation or LLC. The debt incurred on these cards may or may not be personally guaranteed, but will not affect your personal revolving debt ratio.

Always keep your personal and business revolving debt ratios at 10% or less. This will help you to more credible to lending institutions when you are trying to obtain cash credit or lines of credit.

Separating your personal and business credit can also improve your cash flow and saves you money when tax time rolls around. By taking these few steps your business will become stronger in the eyes of both the lending institutions as well as vendors you might be interested in using.

By: Ron Lerman

Understanding Business Credit Cards

admin — Sat, 01 Aug 2009 19:41:28 +0000

Although business and personal credit cards are relatively similar in terms of general purpose, business credit cards also have a number of additional features which allow businesses to keep control and track of company expenditure.

Business cards are a great way to take care of everyday business expenses without the need to carry cheques or petty cash. A business credit card is issued in the name of a business and the debt is the responsibility of the company and not the individual using the card.

Company spending is channeled through a single account and management are provided with reports which include itemized listings of purchases. Controls can be used to limit the amount each authorized person can spend and restrictions can be put in place to prevent misuse such as cash withdrawals from ATM’s. Simple features like these give business owners the peace of mind they need when it comes to one of the most important parts of a business – the cash flow.

Just like personal cards there are a number of options to choose from including low rate company credit cards, cards with large rewards and credit cards with interest free periods. Business Credit Cards may also come with complimentary features such as insurance and banking discounts.

Company cards are usually cheaper than cheques, more secure than carrying large sums of cash and provide separation of business and personal expenses. In our increasingly cashless society, they can also help save time and money with everything from online shopping and bill payment to corporate hospitality.

When it comes to choosing a business credit card, find a credit card which complements your business needs. Don’t be afraid to shop around for the best deal or negotiate with your bank for a better deal. By evaluating and understanding your monthly expenses and business requirements, you will be able to determine a card which best suits your business needs and gives you the flexibility and control you deserve.

By: Clare Witham