How do I Know which Small Business Credit Card is Right for My Business?
Small businesses need lots of cash. Loans are difficult to get for new businesses and even established smaller businesses can have a hard time obtaining bank loans for regular operating expenses. There are some very obtainable means of getting funds to provide smaller purchases. Vendor credit is one method of buying supplies or other regular needs on a payment plan. However, small business credit card accounts have benefits beyond just providing the ability to purchase the things a company needs. Good small business credit cards have extra value in the perks they provide for using them.
The trick to picking the right card is determining which perks you are most likely to actually use. For instance, if you do not travel for business, getting a small business credit card that offers frequent flier miles may be a fun way to get free vacations, but they won’t give you any extra value for your business.
At the same time, if your business does operate a fleet of cars, or if you drive a lot for business, a card that gives you cash off gas purchases, or free gas for so many purchases, it is worth a lot to your business. Lower Interest vs. Better Perks Small business credit cards that offer perks may have higher interest rates than cards that offer no extra bonuses.
If you are going to use the card for regular monthly expenses that you pay at the next billing cycle a higher interest rate is not going to have much of an impact and the bonuses are worth a great deal. If you plan on using the card for bigger purchases that will take months or even years to pay off, the higher interest rate will far overshadow any benefits free miles, gas or other incentives will have.
It is a good idea to have several different types of cards that you use for particular types of purchases. You can buy monthly supplies on a small business credit card with higher interest, but lots of point value for bonuses. Then when you need to buy something expensive for your company, you can use the lower interest rate card that does not have the perks in order to keep costs low on the long term loan.