Best Business Credit Cards

business credit card — Mon, 14 Dec 2009 22:57:17 +0000

Best Business Credit Cards

What makes the best business credit cards the best?

It’s a harder question to answer than you might think and it could be better asked as: What makes the best business credit cards for my organization?

Considering what kind of rewards best relate to your company, or if you need any reward program at all, is a good place to start. But the best place to start is by avoiding potential pitfalls that can severely eat into the bottom line if they catch you off guard.

Let’s look into a few tips that will help you find the best business credit cards for your company.

Tip #1 Determine how the balance is calculated
Not all credit card companies work out your balance in the same way and larger balances equal larger charges from the lender. The most common billing calculation, called adjusted balance billing, is determined using the balance you carry at the beginning of the billing cycle. It then removes any payments or credits and determines the total on which interest is generated. Watch out and avoid compound interest like the plague, this is how unmanageable debt is created.

Tip #2 Get a reasonable grace period
Some credit cards will start charging interest the second you complete a transaction, which is undesirable to say the least. Ensure that your business credit card is going to give you room to conduct interest free transactions so long as you pay the outstanding balance in a timely manner. If you intend to carry a balance, this isn’t as big a concern.

Tip #3 What seems too good to be true usually is
There are a lot of money traps out there when you are searching for the best business credit cards. Here are some to look out for:

Introductory 0% APR. This might seem like a great deal, and it really is until you have the rug pulled out from under you and your business. Be very wary of these kind of offers and find out what kind of APR the offer will boil down to in the long run.

Free point offers. We have all seen these offered to us personally; sign up now, get a thousand points free. Sounds like a great deal, right? Not really. These kind of offers often sugar coat less than palatable annual rates, or wildly high per transaction fees aimed at nickel and diming your company into the poorhouse.

Tip # 4 Lay down the law
Ensure that your staff understand what is appropriate use of the card. Abuse can be as minor as a burger on the way to a job, or as major as vehicle repairs.

Getting the best business credit cards won’t help you at all if your staff don’t appreciate that the money they spend on it is still company money that comes out of the bottom line.

Make sure they know they are being kept track of and accountable. Depending on the card you end up with, some may be able to set spending limits on each particular employee or even the stores they can purchase from.

If you have any concerns about your staff going wild with your credit cards then it may be worthwhile getting a secured business credit card so at least the possible charges are limited.