Many successful small business owners have been able to start their operations with the help of business credit cards. In the past, only business loans are used to finance a business but recently, business credit cards have been introduced in the market. These credit cards are especially designed to provide financial assistance for entrepreneurs. On this post, let us discuss tips on how you can use a business credit card more effectively:
Choose a low rate card. Just as it is important to choose a personal credit card with a reasonable interest rate, you should also choose a business credit card with a low APR.
Pay your balance in full. Paying your monthly balance in full enables you to save money by eliminating the interest rate fee.
Pay on time. It’s very important to submit your payment on or before your due date, not just to avoid the late fees but to protect your business credit history as well.
Ensure credit reporting. Sign up with D&B to start building business credit history. Make sure that your chosen issuer reports to the major business credit trackers like Dun & Bradstreet and Experian (Business) as it is the only way you can build business credit.
Don’t take out cash advances. Although small business credit cards are equipped with cash advance features, cardholders must avoid this option as much as possible. This is because cash advance transactions are not covered by the grace period so you are automatically charged with interest rate the moment you withdraw cash from the ATM. Furthermore, most issuers charge a higher rate on cash advances.
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