Creditcard3

The small business credit card market is a rapidly growing market in the financial services industry. If you are planning to apply for small business credit cards, see how your reasons compare with those of other business credit card holders:

Business credit cards provide credibility and legitimacy to your business. It is an intangible benefit, but when the business credit card company approves a business credit card for your small business, it gives a signal to other merchants that your business has good, sound credit. A business credit card is a very credible imprimatur.

For the start-up small business, or one which has a tarnished record, a business credit card allows your business to build or rebuild a credit history. By ensuring that this credit history remains consistently positive, you will establish the foundation for securing a business loan or line of credit should you decide to expand the business in the future. The business credit card is your guaranteed line of credit for now.

Monthly business expenses are easier to track with a business credit card. The monthly business credit card account statement helps with the reconciliation of the purchases you make on behalf of your business.

The usefulness of the business credit card statement is not limited to tracking business expenses. It can also be used as a reliable and acceptable alternative documentary proof when you prepare your books and your financial reports for income taxation purposes.

Business credit cards and personal credit cards have similar benefits and rewards. When you have a business credit card, you will have a separate opportunity to enjoy discounts, cash back and rewards points on purchases of the goods and services necessary for your business.

When you have business credit cards issued to your employees, they can make purchases on behalf of your company without advancing their own funds, or use the business credit cards when they travel for business. Their use of the business credit cards makes it easier to account for expenses.

When you charge purchases to business credit cards, you get the chance to enjoy cash discounts. Companies that supply business-to-business products normally give significant discounts when the purchase is paid for in full upon purchase. If the purchase is on credit, the discounts are smaller and calibrated according to the financed period. Charges to your business credit cards always count as cash purchases, since your business credit card issuer will take care of paying them shortly afterwards.

The purchases you make on your business credit cards may qualify for special insurance protections from the business credit card company. In case something turns out wrong with the item you bought by means of your business credit card, and the merchant is not willing to return your money, the insurance protection will cover the amount.

There is rightful concern about the high interest rates on business credit cards. Suffice to say that these are still lower than rates on merchant credit. If you make effective use of the float period, then pay off your balance in full each month, you actually avoid paying any interest at all. If you plan to carry a balance, make sure you find the business credit card with lower interest rates.

The rewards business credit cards give great benefit when you do a lot of travel.

In short, it makes good business sense to have a business credit card or two at your disposal.

All the major business credit card issuers have set their eyes on the growing small business credit card market and are trying really hard to get a bigger slice of the pie. They have also realized there is a strong segment of the small business credit card market that could equally benefit from the features of small business credit cards: the group of small contractors and construction companies.

The business credit cards designed for contractors have the objective of inducing them to do away with invoice-based payments by check and to rather shift to more frequent use of their business credit cards. An industry study has shown that less than 5 percent of all spending in 2006 was done by charging the expense to the business credit cards of business owners. The business credit card issuers would prefer small business owners to think of using their business credit cards for everyday business-related expenses and not just for travel and entertainment.

MasterCard launched its industry-specific business credit card designed for construction companies last year. This card also allows longer payment cycles than usual. A similar program for business credit card holders is offered under Chase Contractor Visa Business credit card program. These programs give access to promotional financing and enjoy a strong rewards package. There is no pre-determined limit on spending. This enables contractors to pay bigger-ticket business expenses by using their business credit cards instead of writing checks. Purchases of construction materials amounting to at least 1,000 will be subject to a longer 60-day payment term; purchases below 1,000 will not qualify for this promotional financing benefit.

There are limitations that you should bear in mind, especially if you are angling for the rewards points and discounts. The bonus points are earned only on net purchases that are made with contractors that have classified their merchant locations to the company as contracted building services, building and construction materials, and landscaping services.

There is a limit to the bonus points that can be earned in the categories mentioned above: 20,000 points per month. That is equivalent to 20,000 worth of purchases on your business credit card. However, there is no maximum number of base points that can be accumulated. You will need to distinguish between the two point types.

The business credit card holder should examine the fine print closely to inform him- or herself with the particular services, materials and products that will qualify for rewards points if paid with their business credit cards. The qualified merchants may not be quite as confined as those of the usual branded business credit cards, but still there are limitations.

Your business credit card has no pre-determined limit on spending. But that does not mean you can spend indiscriminately. If a particular purchase amount will result in your business credit card account going over your credit limit, only the portion that falls below the limit will qualify for the rewards points. Beyond that, every charge that causes a breach in your credit limit will be subject to evaluation before it is authorized; the evaluation will take into account both your spending pattern and payment history.

Corporate executives and successful business owners, who have exemplary credit records, usually have no problem in obtaining business credit cards. The card companies that issue business credit cards are in a constant race against one another competing to achieve poll position in a race aimed at securing the custom of these elite business credit card holders.

But then, what about those people whose credit records have suffered a few incapacitating knocks, leaving them in the bad debt category? The truth is that they will definitely have a much harder time when trying to gain approval of a business credit card application than those with good and excellent credit histories. This does not mean to say that those with bad credit records dont need business credit cards!

On the contrary! Every small business – in one way or another – is benefited by having small business credit cards. These benefits are fairly well established by now: the ability to get the business expenses on track with the business credit card, the rewards and cash backs, and the ever ready credit line should the small business face a temporary cash crunch.

The question is: Can they get it?

Heres the rub. Those with bad credit will have to work harder to get a business credit card secured. They will have to find a way to rebuild their credit standing. Contrary to popular belief, personal bad credit cannot be hidden behind the veil of a business. The business credit card issuers will inevitably draw your personal credit report in the process of evaluating your application for a business credit card.

That does not mean to say that all is lost. It is possible to get yourself approved for a business credit card even if you have less than sterling credit. Most of the business credit card issuers have specially designed business credit cards for people with bad credit or no credit history. The only requirement will be that your recent credit activities must be squeaky clean. That goes to say: no recent late payments and no filings for bankruptcies.

In addition to these business credit card issuers, there are also companies that are willing to help build or rebuild your business credit. This eventually leads to business credit cards. These companies have access to a pool of vendors who agreed to provide credit to people with bad credit. By continuing to transact with them and being religious in your payments they can report consistently good credit behavior to the business credit rating agencies, thereby gradually establishing the improvement in your business credit standing

They may have a business credit card issuer participating in the program, who then approves a business credit card for you. The benefits package under this business credit card product can be quite attractive. They can establish an immediate line of credit for you starting at amounts between 5,000 and 10,000 and eventually approve a credit limit of three times that initial amount.

Whats more, the business credit card will be issued with minimal credit or employment checks; in some cases, it is waived altogether. You will not even need to have a checking account. If your business needs some fresh capital, you will also be able to arrange for a secured loan.

If you can link up with groups like these, make sure that you use the opportunity well. Business credit cards are an especially good way to jumpstart the process of preparing your business to qualify for future commercial loans. Good credit histories involving your business credit cards will really lend credence to your business credit report.

Those who run home-based businesses belong to one of the most dynamic segments of the working world. Technology has revolutionized the way people work and we are witnessing probably the largest sociological shift in generations. If you are a home-based business owner you are part of that revolution.

Working from home gives you two wonderful benefits: you dont have to pay rent for office space, and you dont have to commute (no rush, no traffic, less gas). But working from home also entails careful planning especially when it comes to funding the business. This is where business credit cards become very useful.

The most common reason why home-based businesses fail is the mismanagement of finances. Many of those who own home-based business are using their hard-earned savings, home equity loans or lines of credit, and personal credit cards, not business credit cards, as sources of their business funds.

Using your savings may be preferable, if you have reasonable assurance that your home-based business will earn income at a rate higher than the interest rate on your small business credit card. In home equity loans or lines of credit, you will have to pledge the equity of your home. And if your home-based business does not succeed, you could lose your home. On the other hand, unless you use business credit cards for your business, you run the risk of commingling your personal and business expenses, and that makes them harder to manage.

The importance of business credit cards, especially for home-based businesses, cannot be disregarded. Whether the business is home- or office-based, the business needs to keep business finances separate from the owners personal finances. Business credit cards give owners the freedom to do just that. You will really appreciate this business credit card benefit when tax season comes and you download your business credit cards transaction history, as well as your monthly and annual reports, from your business credit card companys website: tax filing becomes a breeze. Keep your personal and business finances separate with your business credit card; itll be good for you in the long run.

When you are just starting out your home-based business, youre likely to incur big purchases. Use a business credit card to pay for office equipment such as computers. You will get some purchase protection, and this is one business credit card benefit that is impossible to overstate.

There are a number of ways to apply for a business credit card. You may be confused about which one of the many business credit cards offers to choose: there are so many flying around. You may want to talk with a friend who is business savvy before making any decision on which business credit card to get.

There may be downsides to using business credit cards, but prudent usage gives you a really effective financial tool. Any business needs credit; and business credit cards help you to establish just that for your home-based business. The best thing to do, if you have doubts on whether you should get a business credit card or not, is to talk to a business consultant about it.