Many business owners, especially small business owners, rarely have sufficient information about business credit cards and the ways they can benefit their business. Single-handedly, your business credit card can determine the success and profit of your business. So, if you want your business to launch and last for a good while, maintaining a good business credit score can help you a long way. Author and experienced entrepreneur, C. Naomi Covington, who understands the benefits of a good business credit score, never understood why there wasn’t enough information about business credit cards and ways to maintain your score available for business owners. Covington took it upon herself to compile critical information from years of experience in the business world and turn it into a book. Her book, It’s Simply Business Credit: For Aspiring Entrepreneurs, Government Contractors, and Franchise Owners, is an essential read for small and big business owners to help them maximize profit and value of their business by using their business credit card smartly.
One of the most essential benefits of a good business credit score is having easier access to acquire loans and flexible payment plans. Business owners need to keep their personal credit card for only personal use and never for professional use, this can harm your personal credit score. As per Business.com, here are some ways to make to the most out of your business credit card:
· Don't pay interest
Credit cards help businesses by offering quick access to capital. Banks make a little money off exchange fees, but they make much more when customers get into a cycle of debt. Business owners should only use credit cards when they can do so without carrying a balance from month to month.
This should be common personal finance wisdom, but many business owners get so involved with the growth of their companies that they fail to recognize bad habits until it's too late. Credit card interest rates fluctuate based on the credit market, unlike traditional loans, which means companies could easily negate future gains by paying higher fees – even if they think they're beating the market. Card owners should maintain constant vigilance to avoid turning a tool into an added expense.
· Optimize card spending for benefits
Many business cards include benefits that traditional financing sources don't offer. These perks can include discounts on travel and lodging or preferred pricing for services. Businesses should explore the market to see which cards offer the most relevant benefits for them.
A business owner who travels infrequently but spends a lot on shipping should not get a card geared toward frequent flyers. Different cards offer perks for shipping, advertising, travel, and a host of other areas. As competition for business credit heats up, a few card companies have begun to allow businesses to design their bonus categories. To avoid spending too much time optimizing card spending, business owners should find one or two cards that cover specific needs
· Watch for introductory offers and terms.
Credit cards attract new users with all sorts of promises. Some advertise zero interest, while others entice applicants by offering thousands of points for new signups. All offers come with strings attached, so business owners should read the fine print carefully.
Offers of miles or points, for instance, usually require businesses to meet a spending threshold within a certain timeframe. Some offers require only a small amount of spending, such as $3,000, while others demand $20,000 or more. Low-interest promotions, meanwhile, might end abruptly when the promotional period ends. A business that floats thousands of dollars on a card could find itself facing a substantial bill after one year. Business owners should only pursue promotional offers when they know what they plan to do with the extra points or money during the grace period.
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