All About Business Credit Cards

Banks realize that there is a fair amount of benefit to be had both ways through offering business credit cards to their business clientele. For this reason, you will probably be inundated by flyers and brochures offering you the opportunity to obtain a business credit card from the various issuers. This is the one occasion, where looking the proverbial gift horse in the mouth, will not hurt. Examine the different business credit card offers to understand the features that are available, which of these you like and which of these you really need.

Just like a personal credit card, the business credit card allows you to purchase goods and services in stores and establishments, over the telephone or via internet. Business credit cards differ from personal credit cards in the sense that:
· The debts are for the account of the business, not for individuals;
· The business credit card is issued in the name of the business;
· There are restrictions in terms of use;
· They provide management reports and itemized listings of expenses charged to the card; and,
· They may include some handy complimentary features such as free insurance and discounts on banking services.

There are many compelling reasons for having a separate business credit card for the business, not least of which is the fact that it is cheaper to effect payments by business credit card than by check. In addition, you (or your people) will avoid the risk of carrying large sums of cash when the business has to purchase items from stores. Other benefits to be derived from a business credit card would include:
· The ability to monitor expenses closely, results in the ability to better control spending;
· A business credit card allows you to shop for items via the internet, which is usually the cheaper option;
· Less time is spent reconciling business and personal expenses; and,
· Personal resources (yours or your employee’s) are not used for business transactions.

The features of a business credit card will differ from provider to provider. You will have a choice between two basic types: The charge card and the credit card. The charge card, like Diners Club and American Express, usually offers higher spending limits, but requires full payment of the bill when it falls due. If your business has sufficient cash flow, the charge card would be a good choice. Most corporations also select this option for the business credit cards issued to their officers.

If the business’ cash flow is not quite as flush, a business credit card makes for a better alternative because it allows you to pay only a portion of the total amount due. Interest is charged on the amount left unpaid. So, if you can spare the cash, rather avoid those costly interest charges by paying the entire outstanding balance as and when it falls due.

Banks are not the only institutions that issue business credit cards. Savings and loans associations, as well as credit unions are issuers. Of late, several big companies also started entering the credit card business. If your business is a regular customer, these companies may extend a business credit card facility to you. This option is well worth the consideration.