Which Small Business Credit Card is Right for You?

The choices when it comes to business credit cards can be daunting. Low interest rate, no annual fee, discounts, fraud protection, and the plethora of rewards options—where do you start and how do you know which card is best for your business?

Here are some tips to help make the credit card selection process as easy as possible:

Evaluate your spending and other habits

First things first: before you can choose your ultimate business credit card, you need to understand your company’s spending habits. Review the expenses from the past quarter. When doing your review, answer the following questions:

• Is your spending consistent or does it fluctuate?
  
• Do you pay your balance in full each billing cycle or are there times when you make a partial payment?
  
• Which merchants or categories of merchants do you purchase from frequently?
  
• Do you or other company employees travel frequently?
  
• Does your company often entertain clients?

Choosing the card

Once you’ve completed your review, you’ll have collected some fantastic information to help you on your business card search. Here are the options to look for and how you to know if they fit your company’s needs:

Credit Limits
Many business owners are attracted to No Pre-Set Limit (NPSL) cards under the belief that it means the cards have no limits. Don’t fall for this myth! NPSL cards do in fact have a limit; it just varies according to your financial information and past spending patterns. An NPSL card might not be good for you if your company has inconsistent spending habits.

If, however, your company’s spending pattern is fairly consistent, the flexibility of an NPSL card may be beneficial. If you have an anticipated high ticket transaction on the horizon, you can contact the credit card issuer to verify that they’ll cover the charge. If you’re unable to plan such charges, they could be rejected.

Low Rate
If you’re a business that doesn’t pay its full credit card balance each billing cycle, you’ll want to find the lowest rate you can. A low APR will help decrease your finance charges. Even a rate that is just 3% lower than your current rate can result in huge cost savings.

However, if your company pays its credit card balance off every time, a low APR might not be as important as receiving other benefits, like rewards, discounts and security protections.

Rewards
If your purchasing review revealed that you tend to buy from particular merchants or types of merchants, a rewards card might be a good deal for your company. There are many credit cards with rewards programs now available for small businesses. You can redeem your points for a variety of rewards, such as frequent flier miles, merchandise, gift cards and cash back. With a little research, you are likely to find a rewards card that offers gift cards for the merchants that you shop at the most. This essentially equals free merchandise for your company.

Travel
Travel rewards are another feature you may want to take advantage of if you and your associates do quite a bit of travel. Each time your business card is used, you will earn points that you will later be able to redeem for airfare, hotel rooms, rental cars, gas gift cards and restaurants. This will cut down on the costs of travel. And you may be surprised to see that these rewards can be utilized for higher-end hotels, so you don’t have to downgrade on the accommodations that you’re used to with your business travels.

Concierge Services
If you often entertain clients, you might want to search for a business credit card that offers concierge services. These services will help you book restaurant reservations, secure tickets to the hottest shows in town and take care of your other needs.

Cards featuring concierge services often come with an annual fee, so you’ll want to make sure your company will actually use this benefit if you seek out these cards. If you use the service frequently enough, you will find that it is worth the annual fee investment.

Follow @CreditDonkey or write to Meghan Clark at meghan@creditdonkey.com

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