Choosing the right credit card for your small business can be a daunting task. There are so many types of cards to choose from, and each one comes with its own set of benefits. But, if you know what features you should look for in a card before making your decision, it will make this process much easier. Below are factors to consider when applying for a credit card for your business.
1. Avoid credit cards that attract annual fees or have high-interest rates.
Don’t apply for a credit card with an annual fee and high-interest rates. Choose one that doesn’t come with these fees, so your business won’t rack up extra expenses. Make sure the interest rate isn’t too high either, because this can cause you to pay more than needed each month. To be on the safe side, choose a business credit card with no annual fee and an interest rate that is below 20% APR.
2. Go for cards that offer cashback and reward points.
Cashbacks and reward points are often associated with consumer cards, but business credit cards offer these features as well. Cashback is usually based on a percentage of spending, while reward points can be redeemed for cash or other rewards. Depending on how much your small business spends every month, you should look into what types of benefits come along with your card.
Cashback and reward points can help you earn money because they are given to you for spending with a credit card. However, make sure that using these cards doesn’t result in more fees or higher interest rates because this defeats their purpose of earning extra income.
3. Consider cards with no foreign transaction fees.
Business owners who travel internationally should look for credit cards without any foreign transaction fees. These are additional charges tacked onto purchases made outside of the U.S., and they can seriously increase your costs when you’re abroad. Depending on how often you’ll be traveling, obtaining a card that doesn’t charge these fees may make sense.
4. Look for cards with flexible payment options.
Business owners who use a credit card to make purchases can benefit from having a card that allows them to pay their bills in installments. This gives you the option of paying off your balance over time, and it makes managing your business’ expenses easier. For example, if an unexpected expense arises or you need additional capital for a special project, you’ll know that you have the extra money to pay for it.
5. Focus on cards that offer free employee cards.
Employee cards are included with business credit card accounts, and they come in handy for small businesses. If your employees travel often or plan to make purchases using the company’s account information, it makes sense to look into getting a card that offers additional employee cards at no cost. This way, you can keep track of your employees’ spending and keep up with all of the expenses that they incur.
Choosing a credit card for your small business requires some upfront work, but this doesn’t mean it’s hard to do. The most important thing is ensuring you get a product that fits with what you need from a credit card provider. By doing so, you’ll avoid any unexpected fees or interest rate hikes in the future.