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How A Business Credit Card Could Be A Valuable Asset |
By:
Lorna Shea |
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How A Business Credit Card Could Be A Valuable Asset
Lorna Shea
If you are setting up or already run a small business, you might need a way to separate your business expenses from those that are purely personal. The best way to do this is to set up a business credit card account, which will then allow you to make business transactions either by telephone, using the Internet or in person. If you authorise business credit cards for any of your employees, then they will have access to these facilities as well.
Initially, you will need to work out how the credit card will be used and to do this, you'll need to work out the amount of credit that your company will actually need. It is a good idea to work this out in accordance with your monthly outgoings, as your company will be paying the credit bill on a monthly basis. Once you have calculated how much credit your company can afford to borrow, you should then try and assess how many cards your company will need and which of your employees will be authorised to carry and use them. This may mean that you will need to employ a system that keeps track of your employees' expenses. There are some credit card companies that offer a facility which reports the use of a credit card and allows the relevant data to be downloaded to accounting packages, such as Sage.
Some credit card companies also offer incentives or perks along with business credit cards, which might be beneficial to your company; if you employ people who travel a lot, then you might want to consider a deal on travel insurance, air miles, road miles or hotels. It is worth shopping around for the deals that often accompany business credit cards. Online comparison sites are a quick and easy way to see if there are deals out there that might suit your business needs. These sites can also tell you about other facilities, including membership fees, branch access, overdraft protection and bespoke accounts. Should you see a business credit card that suits your purpose, you should then pay a visit to the website of the company you have chosen and read around the introductory offers; once these expire, you need to be sure that the interest rates are still manageable in terms of repayment.
It can work in your favour if you are able to apply to an institution with which you already do business; this way, you are more likely to be considered for favourable interest rates and higher credit limits. However, it is very important that your calculations reflect your company's ability to meet the monthly repayments; as the director or manager of a small business, the company's credit is likely to be tied in to your own personal credit score. Any late payments or unauthorised debt can have a negative impact on your own personal credit rating and hamper your company's capacity for further credit. You should also make your employees aware that the card is not to be used as a simple substitute for cash as the transaction fees can be high and related interest is immediately incurred.
A good method of finding the card that is most suitable for your business is to use one of the many available online comparison sites. These are available for business credit cards as well as those available for personal use; the comparison sites display the relevant information pertinent to each credit card, such as the introductory offers, interest rates, APR and details of each loyalty reward scheme.
The application itself will require a credit check on your own circumstances and those of your company; an application is more likely to be favourably considered if the company has been trading for 2 - 3 years and has a good credit history. Any negative impact on your own personal credit is likely to affect that of your business, so checking your own credit score is a pertinent consideration. Should the application be successful, the whole process should take little more than 10 days. Then you will be able to reap the benefits that a wisely managed business credit card can offer.
Lorna Shea looks at the pros and cons between http://www.mbna.ie) Business and Personal Credit Cards. Read this informative article helping you to research the http://www.mbna.ie) best Business Credit Card deal online
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Article Source: http://www.statssheet.com/articles/article67558.html |
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