What Types of Business Credit Cards are available?

As a small business owner, it can be quite a challenge deciding what the best type of business credit card to get for your business. When looking for the best types of cards for your business, you will first want to know about the different types that are available today.

A Business Debit Card is a card that works like a business checkbook because the limit is the amount of funds you currently have available in your business checking account. Every time you use it to make a purchase the amount charged is deducted right from your account.

A Secured Business Credit Card is specifically designed for businesses with no credit or less than perfect credit history and is very similar to prepaid cards. An initial security deposit is required which establishes your card’s credit limit. In most cases a minimum deposit of $500 is required by the card issuer. The bank then holds your deposit as security in the event you fail to pay your credit card bill. Once you begin making purchases you will receive invoices like a regular credit card.

An Unsecured Business Credit Card works just like a normal, revolving, unsecured consumer credit card. Credit limits are based upon many factors depending on the issuer and can range from personal credit and/or business credit ratings, years in business, annual revenues and so on. These credit cards give your business the opportunity to earn incentives and rewards.

A Business Charge Card has all the convenience of a credit card without the high price of interest. When using this card you’ll have to pay your balance in full each billing cycle. Because you can’t carry a balance, a charge card doesn’t have a periodic or annual percentage rate, so there is no rate for a charge card issuer to disclose.

If you plan on paying your balance off each month, a card offering travel mile rewards or cash back bonuses may be the best business credit cards; however, if you plan on maintaining an ongoing balance, a low introductory or standard APR might be a better option.

Remember, just because a card issuer offers all kinds of perks and rewards doesn’t mean it’s necessarily the best card. Always read the fine print so you completely understand the terms and conditions and fees associated with the card.

One of the most important factors in deciding on business credit cards, is to absolutely know that you WILL be building your business credit with these creditors. 90% of business creditors DON’T report to the bureaus, therefore, you’re not building your business credit!

It’s also important to note that even though business credit cards are not covered under the CARD Act, certain issuers are extending the CARD Act protections to its card holders. This is just another factor to consider when applying for a business credit card for your business.

Expert Credit Consultants, LLC specializes in establishing business credit and funding using our exclusive Business Credit and Financing Suite as well as consumer credit restoration and optimization. www.ExpertCreditConsultants.com.