If small business is not the future of America, then we have no future.

There was a time when credit card issuers were reluctant to deal with small businesses, but those days are gone. Today, credit card companies are vying for your business, partly because the climate is right for small businesses to flourish, and partly because the field of business credit cards is not as saturated as consumer credit.

There has never been an easier time to get a credit card for business, which is considerably easier than obtaining a bank line of credit nowadays. As usual, you have to be careful when making your choice, so keep these five factors in mind.

Why You Need A Small Business Credit Card

Can’t you just charge your business expenses on the personal credit card you already have? No, because it’s not the 1970s anymore. In those days, it made sense for a small businessman to charge everything on his Diners Club credit card.

Nowadays, you need to find the best business credit card that will help you:

  • Track your business expenses separate from your personal expenses
  • Help you establish and stick to your company budget
  • Prepare your business tax forms effortlessly
  • Issue credit cards to your employees for business use
  • Save you money through perks and rewards programs
  • Build a positive credit history for your company

Check The APR and Credit Card Fees

Although this shouldn’t be your only criterion, the annual percentage rate is one of the most important considerations when selecting a credit card for your business. If you’ll be carrying a balance from month to month, it is imperative that you choose the business credit card with the lowest APR you can find.

Likewise, find out exactly what credit card fees you will be charged. Make sure the perks and rewards offered are not cancelled out by the annual fees. Any fees can probably be deducted on your taxes as a business expense, but double check with your accountant.

How Well It Can Track Your Business Spending

A card that’s versatile and easy to use is great, but will it help you keep track of your business expenses and spending habits? Most credit cards geared for small business offer free reports, but some are detailed and some are just skeleton reports that you have to flesh out with separate software applications.

The Reports Must Suit Your Business Model

Also be aware of the frequency of reporting. If you need weekly reports to stay current, make sure your credit card can keep up with you. Ideally, the credit card reports should be flexible so you can customize them and you must insist on a company that allows you to download your credit card data directly into your accounting program.

What Penalties Can Be Incurred

Find out beforehand what happens if you fail to pay the bill in full each month, or if you make a late payment. No one plans to default on their payments, so few people compare and contrast the different policies for tardy payments. However, this is highly important because some business credit card issuers have severe penalties for late payments, ranging from taking away the rewards you’ve already earned to steep late fees and higher interest rates. In some cases, late payments on your business credit card can even affect your personal credit score.

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