Every small business needs a credit card. But with ever-changing interest rates and new program options, making sure your business does business with the right credit card can be a confusing decision.
Here are a few things you should consider before picking your plastic.
If bringing in those rewards is your goal, a credit card does it quicker than a debit card. When going the debit card route, you’ll need to spend significantly more to rack in the big time reward points.
So many programs to choose from, and so few we actually take advantage of! Convenient rewards that you're more likely to use might include office supplies, phone services and software services. Make sure you know any and all limits that are tacked onto the rewards programs. Read those credit card agreements in order to determine which card has the best rewards for your company.
There's no good reason to get sucked into credit card programs that also have unnecessarily high fees. Those fees can ruin any “deal” you thought you were getting with a rewards program.
In particular, familiarize yourself with any international fees if you’re traveling a lot for work, and aim for the lowest. Small business credit cards also come with interest rates so, just like a regular card, look for the best rate.
Look for a card with an excellent fraud protection policy. Undoubtedly, your small business will be using your credit card in a variety of situations, and there’s always risk with your card number being available to so many vendors. A good credit card company is one that has no problem immediately canceling your card and making sure that you're not charged for any fraudulent purchases, should such a situation arise.
You want a card that offers a grace period for your payments. Most business credit card companies do have a 21-day grace period for their cardholders. Avoid card companies that don’t offer any leeway on payments.
Pick a card that your business can manage online. Running a business is time-consuming enough; the last thing you want to do is have to worry about mailing one more paper bills.
Familiarize yourself with your local credit unions. They keep rates competitive – ideal for those shopping around for the best.
Signature vs. PIN.
Understand that whole signature vs. PIN issue. Some programs want your John Hancock in order for you to collect on the perks, so make sure you know how to get what you signed up for. Choose the card that allows for the most rewarding options.
Especially if you travel for your business, make sure your card is accepted around the world. Certain credit cards are accepted in more places than others. You want a card that will be accepted most places, regardless of where you are, so that you aren’t left without cash or credit.
Remember: as long as you pay them off on time and in full, credit cards are ideal for making large purchases, and they offer the best protection in case your business has to dispute a purchase.