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How to choose the best Credit Card for your Business? There are many Business Credit Cards with attractive features; what features are most important?
When you are a business owner, banks offer you several business credit cards to meet your daily needs. Though the process of selecting a business credit card sounds easy, there are multiple factors for you to consider before going for the best credit card. The credit limit, credit-free period, usage limitations, and the interest rate are some factors to consider in the selection process. These cards are like regular credit cards and can be used for personal use too. But they give you higher rewards on business related transactions.
Here is a simple guide to help you choose the best business credit card for you.
Some Of The Popular Business Credit Cards In India
- ICICI Corporate Credit card
- SBI Platinum Corporate Credit Card
- Axis Bank Business Credit Card
- HDFC Business Money-Back Credit Card
- Citibank Corporate Credit Card
- YES First Business Credit Card
- Kotak Corporate Card
- Standard Chartered Business Gold Card
Business Credit Card Features That You Should Consider Before Applying
APR – Annual Percentage Rate
The interest rate you will be charged on your purchases is very important. Credit cards charge somewhere between 36-48%. So you need to ensure that you don’t leave any balance in your monthly bill. Many business credit cards also offer you a 0% initial APR for the first few months. It is a great benefit for your business transactions like utility bills, purchase of office furniture and stationery, paying for travel tickets, and more. Find a card that gives you this benefit.
Joining Fees & Annual Fees
Since business cards are considered as superior benefits cards, they may have higher joining fees and annual fees. If you have a high credit score and a good relationship with the bank, they may offer to waive the joining fees and annual fees. Check with your credit card company on this aspect before signing up for one.
Here is a list of Zero Annual Fee Credit Cards From Popular Lenders
Fees & Other Charges
As with joining fees and annual fees, credit cards also have a slew of various charges relating to your credit card maintenance and transactions. They may charge late fees for late payments, annual maintenance charges, charges for using the card in a foreign country, and so on. All credit card companies charge these but find a card that charges minimally.
Fuel Surcharge Waivers
If your business requires frequent intercity travels, your fuel purchases can get you attractive rewards and cashbacks. The 2.5% fuel surcharge can be waived off with the right fuel credit card.
Air Miles For Frequent Travelers
Interstate travels by flights can also earn you air miles and other air travel related rewards that can be redeemed for cash backs and discounts.
Rewards On Paying Utility Bills For Your Business Premise
Utility bills make up a major part of your office maintenance. So you can use your business credit card to pay for these services like electricity, telephone, mobile bills, internet and water charges using your credit card and avail huge rewards
Here are some ways you can redeem your credit card reward points
Meeting Daily Petty Cash Needs
Petty cash expenses are also an integral part of running a business. Expenses like stationery, office supplies, snacks and refreshments for visitors and employees, stamps and postage, and other small expenses are usually paid by cash. This requires you to maintain a healthy cash flow every month. You can overcome this by paying for all these expenses via your business credit card. This reduces the need for daily cash requirements and also gets you rewards and cashbacks for the transactions.
What Are Some Factors You Need To Keep In Mind Before Getting A Business Credit Card?
Not all businesses need a credit card. What is your reason to get a business credit card? What are some pointers to remember before you apply for a business credit card?
Building Your Business Credit
If you are a start-up, you might not have a credit history to avail higher loans and credits. A business credit card is a great way to start building your credit from bottom up. So, if you think you can manage your credit well, apply for that business credit card today and start building your credit!
Personal Liability
Business credit card is an unsecured loan. But lenders offer credit cards based on an individuals’ credibility. Who is going to take up the personal guarantee for your business credit card? Is it going to be you? If it is so, are you confident of the spending habits of the people who will be using this credit card? How are you planning to keep a track of the transactions? You need to have a system in place so that you don’t overspend and end up in a debt trap. Because, being liable for a credit card affects your personal credit score too.
Does Your Business Really Need A Credit Card?
What are the common expenses of your business? Can they be met using a credit card? If your business does not make any payments that can be carried out using a credit card, then there is no point in getting one. Same with fuel surcharges and air miles rewards; if you don’t travel, what is the point of getting a credit card that gives you these rewards?
Rewards And Cashbacks Are Futile If You Don’t Accumulate Enough
Credit card reward programs usually have an expiry date, and you need to have accumulated a certain amount of reward points to redeem them. If your expenses are not high and you have not accumulated enough reward points before the expiry date, the rewards are wasted. So, don’t go for a credit card unless your expenses will get you enough cashbacks and reward points to be really beneficial.
Credit card companies come up with various offers to attract businessmen to buy their credit card. But you, as a business owner, have to make the right decision of whether to get a credit card or not. And if you are getting one, take some time to shop around and find a credit card to suit your business needs. And most important of all, never use the business credit card for your personal use.