Qualifying for a Business Credit Card

Filed under: Business Credit Tips

Many business owners find that having a business credit card can make things a lot easier. You can protect your credit score as an individual and keep your personal spending and accounting completely separate from the business. When it comes time to get ready for tax season or even to pay your own salary, the clear distinction of the two is beneficial. While applying for a personal credit card seems simple, there are certain requirements that need to be met in order to qualify and obtain a business credit card.

Your business needs to be official in order to qualify for a business credit card. Remember that you want this to be completely separate from your own finances, so the company itself will be working through the application. You must have a business name. Once you have a name, be sure to register it with your local area. This establishes some credibility to your company.

Next, you will need to establish just what your company is. You can choose from options like sole owner or even proprietor. However, this leaves you still attached to the company financially. In other words, the company`s credit and credit score is directly attached to you. Other options that make a more distinct separation include an actual corporation or LLC. This is the type of paperwork that will be required as you attempt to apply for credit. A lender will want to know just what they are getting involved with.

Once you have a name and have decided on the structure of your business, you will need a business license. Once again, you are establishing credibility and setting up your company apart from yourself as well as others in the community. The license will also be a necessity for establishing a business credit card.

With a business name, an established structure and a business license, the final necessity is a federal tax ID number. This is the final step to separate you from the company. From this point on, you will not only be registered with the federal government, but you will be expected to file taxes separately as well. You will file with your personal taxes as well as your business taxes. A credit card company will also need to have this federal tax ID number before extending you a line of credit.

When you start the application process, it is important to have all of this paperwork already established and ready to go. If you are going into a bank to apply for a business credit card, you can bring the paperwork along. If you are searching online, be sure to have a copy of these papers that can be sent through the mail, faxed in, or even scanned and emailed. This allows the lender to set up a separate account for the business, completely separate from you, your social security number and even your own credit score.

As a final step, be sure that you have a way for the bank to contact your business. If you were to apply for a Tesco credit card, this is just one more way to draw a distinction between you and your business. While you can use your home address and phone number, you may want to consider setting up something separate for the company. You can choose to rent a post office box to receive business mail. Depending on the nature of the business you may also want a separate phone line or number. At the very least, be sure that you have at least one email address dedicated to your business.

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Getting a business credit card – Do you remain personally liable when you incur debt?

Filed under: Business Credit Tips

According to the research made by Pew Safe Credit Cards Project, it has been seen that the new regulations have made consumer credit cards safer and more transparent in the recent months, but the same doesn’t hold true when it comes to getting business credit cards. The Credit CARD Act of 2009 (Credit Card Accountability Responsibility and Disclosure Act) has brought in few changes that has made consumer credit cards more protected for the credit card holders. In fact it has also been suggested that both credit card fees and interest rates have stabilized for those particular cards that are regulated within the term of the CARD act. Mismanaging your business credit cards may make you run into debt and you may have to seek help of credit card consolidation options to manage your debt.

However, the CARD act clauses does not apply for the business credit cards and thus the Pew report suggest that all the aforementioned protections are not applicable for those who use business credit cards. It has been studied that every year, more than 15 million business credit card offers are mailed to most households with varied income levels. The large numbers of offers that are usually sent to the American households represent the risk that they may face. Although some of the nation’s largest banks have voluntarily made their business credit cards more transparent so that this enables the users to feel free while using their cards. Though it’s unclear how many business credit cards are held by the individuals, but about 11 million small business credit card accounts with an average of 1.4 cards per account.

Some risks that you must consider – What the Safe Credit Card Project has to say

The researches made by Pew have analyzed some business credit card application disclosures that are provided by the business credit card offers during January, 2011. Some aspects of this study are:

*If you have a business credit card, you must be aware that 80% of such cards are subject to any time change in the clauses and terms of the card without even the chance to opt out from it. If the credit card is protected under the CARD Act, the card holder is supposed to receive 45 days notice and then can also opt out of them.

*Almost 68% of the business credit cards carry an over-the-limit fee. However, only 11% of credit cards issued by banks and covered under the CARD Act include over-the-limit fees.

*85% of business credit cards have some convenient terms included in them. They allow the card holder to repay the low-rate balance before they start paying off the high rate balance. However, this practice is not allowed by the cards regulated by the CARD Act.

*68% of credit cards carry hefty fees for late payments. Under the terms of the Credit Card Act, the consumer credit cards are well protected by some regulations against late fees.

*The Pew Safe Credit Card Project has offered a suggestion to safeguard business credit cards too in order to alleviate the level of personal risk involved. In order to protect the consumers in a better way and avoid running to business credit card consolidation options, the consumers must also reap the benefits of the Credit CARD Act.

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8 Reasons to Use a Business Credit Card

Filed under: Business Credit Tips

Credit cards are fast becoming a business necessity. They’re flexible, easy to use, convenient and offer users the ability to make purchases instantly, anywhere in the world.

We’ve spent some time analysing credit cards aimed at businesses and have put together a list of our top 8 reasons to use a company credit card.

  1. Easy tracking of expenses and purchases – Using a credit card for business purchases makes it easier to track expenses. The majority of credit card providers offer comprehensive expense reporting (both online and off) which can save you countless administration costs and a lot of hassle.
  2. No more petty cash – Petty cash used to be the most popular way to pay for small, incidental purchases but the days of the petty cash tin are well and truly over. These days it’s more common for companies to make purchases online or over the phone. Providing key staff members with a credit card that’s attached to a business account means you can make instant purchases and reconcile expenses quickly and easily. 3. Rewards and incentives. The majority of business credit card programs offer rewards and incentives for users. Organisations can save money on a variety of goods and services from petrol to air travel, insurance and other professional services.
  3. Build business credit – One of the most important reasons for applying for a business credit card is to build your business credit. This will come in handy if you need to take out a business loan in the future. Responsible use and a consistent payment history will be great assets to your credit rating.
  4. Separate business and personal finance – If you’re a small business owner you’ll know how important it is to separate business and personal finance. Having a business credit card will help with this division and will come in especially handy around tax time. Remember to keep your accounts separate and don’t be tempted to make personal purchases on your business credit card (or vice versa).
  5. Large purchases or unexpected expenses – There may come a time when you need to buy supplies, make a one-off payment or pay a large bill. Business credit cards help you to make these one off payments quickly and are more convenient than applying for a business loan.
  6. Embrace the quiet times – Cash flow is a major concern for all businesses and even more so if you have employees or creditors that rely on your payments. A business credit card can help you cover the quiet times and the seasonal lulls.
  7. Say goodbye to cash – Having cash on-site or carrying it around with you is not a good idea. Business credit cards reduce the need for ready cash making your business less of a target for theft or loss.

If they’re used responsibly, business credit cards can help you run your business better and even save you some money.

Article Source: http://www.articlesbase.com/credit-articles/8-reasons-to-use-a-business-credit-card-2993484.html

About the Author

Find more info at the credit card comparison website; Credit Card Researcher, inlcuding  business credit cards. Australia’s best credit card comparison website.

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Important Facts About Business Credit Cards

Filed under: Business Credit Tips

Changes made to the credit CARD law are only applicable to personal credit cards. For business credit cards, most of the provisions do not apply. For this reason, business owners who use business credit cards are advised to be more careful on how they use and manage their credit card accounts.

In this post, let’s talk about the basic facts that owners of business credit cards or those who plan to get one must understand. First, let’s talk about the risks and then we will consider the advantages.

Business Credit Card and Personal Liability

Business credit cards enable business owners to separate personal and business finances.  This prevents confusion especially as expenditures are bound to increase as the business grows. Despite being a separate account however, the business credit card owner is not exempted from liability. This means that the account holder is accountable to pay for the debts incurred using the business credit card.

Before signing up your business credit card application, be sure to read and understand the Terms and Conditions, particularly the Liability Clause. As the owner of the business, you accept responsibility for the debts in that account.  IF you plan to distribute employee credit cards, you need to keep in mind this crucial fact.

To protect your account, a business owner must pay close attention to how the business credit card is used for financing the business. All charges will be reflected in your account but you need to keep an eye for employees who could be using their supplementary card for personal purposes.

Enjoy Business Credit Card Benefits

Certain features are exclusively offered for business credit cardholders. This provisions include a higher credit line, yearly account summary reports, more attractive reward programs, business credit reporting, just to name a few.

Why would you need a higher credit line? A high credit limit reduces the risk of maximizing or exceeding your limit which can result to penalty charges and lower score. Keep in mind that to maintain an excellent credit rating, you must keep your -to-debt ratio at a low level.

Aside from the monthly statement of account, a yearly account summary is also provided. This document is an important reference when doing your yearly inventory and in preparing your business taxes. Through this report, it would be easy to determine which of your business expenses are eligible for tax deductions and tax credit.

Credit cards for small business also offer bigger reward programs compared to personal reward credit cards. By choosing a reward program that complements your business, you can cut back on your costs and enjoy special perks and privileges.

Last but not the least, only credit cards for business enable you to build corporate credit as you use your credit card for business expenses. The key is to keep your credit limit usage minimal and to pay your charges on time. Keep in mind that business credit trackers are different from consumer credit reporting agencies so you must look for a business credit card that will report your payments to the business credit bureaus like D&B.

Article Source: http://www.articlesbase.com/small-business-articles/important-facts-about-business-credit-card-3431554.html

About the Author

Pamela Williams is a Loan Consultant, Internet Marketer, Writer and owner of BusinessCreditCardSite.com, a finance company Las Vegas Nevada providing support for businesses all across the US particularly with obtaining business credit cards. Visit www.BusinessCreditCardSite.com

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Why Is It Important to Apply Small Business Credit Cards?

Filed under: Business Credit Tips

If you are a small business owner, have you thought about financing your company with a business credit card? Some business owners may feel hesitant to apply for a business credit card and choose to use their personal credit cards instead. Nevertheless, there are certain advantages of using a credit card that is truly designed for small businesses. In this post, we will take a look at each of the major advantages.

Get a higher credit line. A personal credit card has a limited credit line so it’s easy to maximize your available credit when you use it for business expenses. On the contrary, credit cards for small business are especially designed for business financing so you can expect a higher credit line as well.

A business credit cardholder can enjoy $50,000 of credit line or even higher, depending on the issuer and business credit rating. If you have a high business credit rating, then you can expect to get a higher credit line as well.

Build business credit history. Small business credit cards can also be used to build a solid credit history for your company.  Find a business credit card issuer that will accurately report your payments to major business credit trackers like Dun & Bradstreet and Experian Business.

Remember that business credit trackers are different from consumer credit reporting agencies. If you will use a personal credit card, then your payments will only be reported to consumer credit reporting agencies, not to business credit trackers.

Separate business and personal finances. It’s very important to be able to separate your business account from your personal accounts. By opening a small business credit card, you can easily separate these two accounts. In addition, you can protect your personal credit history from damages in case you encounter problems with your business credit card debt.

Keep track of your business spending. You can easily determine which of your expenses are eligible for tax deductions simply by checking your business credit card account. Aside from your monthly statements of account, you will also be sent quarterly and yearly account summary reports.

Convenient mode of payment. Using a small business credit card to pay bills and make purchases is more convenient than using cash or issuing checks. Business credit cards can also be used to place orders from the internet.

Get rewarded for your spending. Many business credit cards offer special reward programs. Thus, as you use the credit card to cover business expenses, you can also enjoy great rewards, discounts, and perks at the same time. Most reward credit cards for business are affiliated with business-to-business vendors and suppliers so you can enjoy discounts from your purchases as well.

Enhance your company’s image. When you apply for a business credit card, you can have your company’s name and logo printed on the card. This is great way to enhance your company’s image. Suppliers and vendors would be more confident to do business with you when you have a credit card for business.

Article Source: http://www.articlesbase.com/small-business-articles/why-is-it-important-to-apply-small-business-credit-cards-3508504.html

About the Author

Pamela Williams is a Loan Consultant, Internet Marketer, Writer and owner of BusinessCreditCardSite.com, a finance company Las Vegas Nevada providing support for businesses all across the US particularly with obtaining business credit cards. Visit www.BusinessCreditCardSite.com

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Take a Look at Secured and Unsecured Business Credit Cards

Filed under: Business Credit Tips

Having good credit history is certainly an advantage when applying for new credit. The same thing is true for business owners who want to obtain a business credit card. There are actually two types of credit cards for business – Secured and Unsecured Business Credit Card. In this post, we will discuss what each of these business credit cards have to offer and how you can choose the right one for you.

The Non-secured Small Business Credit Card

Any small business with good personal credit can easily get approved for a business credit card. Even if you have just started up your company and have yet to build business credit, getting approved should not be a problem. In fact, using a business credit card is a great way to build your corporate credit as long as you pay your balances on time.

The Secured Small Business Credit Card

Secured business credit card issuers do not grant approval based upon the applicant’s credit rating. Nevertheless, this type of account does require the submission of cash deposit. The value of your security deposit will also determine the value of your credit line. Through this arrangement, the bank or issuer gets some assurance that funds are readily available in case you fail to keep up with your payments.

The great thing about secured business credit cards is that they can be used to rebuild your bad credit. How? Through regular use of the credit card and timely payments, an entrepreneur can surely rebuild his/her personal credit rating while building good business credit at the same time. It will usually take just a few months to a year to improve bad credit, depending on how bad the damage is.

Things to Remember About Credit Cards

Which is business credit card is for you? Obviously, if you have no problem with your personal or business credit history, you should look for a business credit card that offers the best deal. On the other hand, if you have imperfect personal or business credit, acquiring a secured credit card will give you the break you need. Regardless of what type of business credit card you use, you must follow these simple tips for cardholders:

Choose credit cards that report to business credit trackers. Indeed, not all credit cards for business available in the market provide credit reporting to the business credit bureaus. You must make sure that this provision is included before signing up for a business credit card.

Choose a credit card that matches your business. Consider carefully your financing needs as a business and look for a credit card that can provide you with the assistance and services you need. If you want a reward business credit card, see to it that the program is easy to follow.

Pay attention to payment schedules. Never underestimate the importance of paying on time. There are many advantages to being a prompt payer such as not getting penalized with fees, reducing the risk of debt build-up, and maintaining good business credit.

Use your business credit card for business only. Fight the temptation to use your business credit line for your personal whims as this can easily lead to problems. Always keep your personal and business finances separate from each other.

Article Source: http://www.articlesbase.com/small-business-articles/take-a-look-at-secured-and-unsecured-business-credit-card-3333411.html

About the Author

Pamela Williams is a Loan Consultant, Internet Marketer, Writer and owner of BusinessCreditCardSite.com, a finance company Las Vegas Nevada providing support for businesses all across the US particularly with obtaining business credit cards. Visit www.BusinessCreditCardSite.com

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Personal Liability and Business Credit Cards

Filed under: Business Credit Tips

Copyright (c) 2010 Liz Roberts

When applying for a business credit card, you’re required to sign the Agreement form which includes all the terms and conditions of your credit card issuer. Part of these conditions is the Personal Liability Agreement where the business credit card holder agrees to be the one responsible for the payments of all future debts that would be charged to the card.

If you are an entrepreneur with a credit card for business, are you really aware of this condition? Are you well-aware of your obligations as a card holder? In order to be clear on this issue, let us talk about how personal liability applies to business credit cards.

Personal Liability and Small Business Credit Cards

If you have just started your business and you have not yet established your business’s credit history, your potential lender or your credit card company would take your personal credit report into consideration. If your personal credit history qualifies with the card’s requirements, chances are your application would be approved. Nevertheless, you’ll be subjected to the personal liability statement on your contract.

What does personal liability mean? Since your personal credit report was used as the basis of your approval, how you use your business credit card will also directly affect your personal credit history. Even if your business and personal credit card expenses belong to two separate accounts, both will still be reflected on your personal credit report.

This means, if you are frequently late in submitting your payments to your card, your own credit score can be badly affected. Remember that late payments can pull down your credit score whether you used your card for business or your personal credit card. If you exceeded your business’s credit limit, your credit score will also suffer. It is important to be responsible in managing your obligations to both your personal and business cards.

Is There A Way to Free Yourself From Liability?

Is it possible to get away from your business credit card’s personal liability clause? Yes. Bare in mind that the reason why this agreement was executed is because you still don’t have a business credit. Nevertheless, as soon as you get approved for a business credit card, it is wise to also sign up your company with a business credit reporting agency such as Dun & Bradstreet or Experian.

By establishing a separate credit history for your business, you can soon be set free from the personal liability connected to your business credit card. Why do you think this is important? Keep in mind that some consumer rights that are applicable to personal cardholders may not apply to owners of business credit cards.

For example, the right to complain about damages with the products you received or the right to dispute unauthorized charges on your account does not necessarily apply to business credit cardholders. Thus, wrong charges on your business card account can instantly affect your personal credit. By separating your personal and business’s credit report, you can protect your personal credit and free yourself from possible liabilities.

Article Source: http://www.articlesbase.com/finance-articles/personal-liability-and-business-credit-cards-3236484.html

About the Author
New Horizon Business Services, Inc NHBS, Inc has been providing consumers and business owners with financing since 1989. Join our mailing list for Free Tips on Rebuilding and Repairing Credit. Click here for the list for business credit cards

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Business Credit Cards for Business Financing

Filed under: Business Credit Tips

Financing a business can be a challenge, especially if you only have limited funds in your account.  Most entrepreneurs seek out business loans or bank loans in order to finance their businesses.  Aside from traditional business loans, what other options do you have?  Where can you get additional assistance for your business financing purposes?  In this article, we’ll be talking about business credit cards and how they can help in shouldering your expenses and in building your business credit.

Small Business Credit Cards – Wonderful Financing Tools

You don’t have to be a big company to qualify for business credit cards.  Nowadays, credit card companies have issued cards that are especially designed to meet the needs of small business entrepreneurs or home based enterprisers.  Whether you own a small or big business, you can surely find a business credit card that suits your needs.

Can you apply for a credit card even if you’ve just started your business?  The answer is yes.  Even if you haven’t yet established a separate credit history for your company, credit card companies will still consider your application by taking a look at your personal credit.  If you have a good to excellent credit score, you can have an easier time getting approved for small business credit cards with the best deals.  

Nevertheless, if your personal credit score isn’t as impressive as you hoped it would be, you can still get approved for a secured business credit card.  Secured cards are particularly designed for entrepreneurs who have a problem with bad credit.  This business credit card is secured by submitting a certain amount of deposit to the card holder’s account.  In fact, you can use a secured business credit card to start building your business credit.

How can business credit cards help with your financing demands?  First, it frees up your available cash flow so you can save them for your basic expenses.  Having a business credit card also gives you the assurance that you have a reliable financial resource in case of unexpected or emergency expenses.  For start up businesses, credit cards are a great way to invest on the equipment you need without paying for them in cash.

Another advantage of using business credit cards is you can track your spending more conveniently.  Aside from the monthly statements of account sent by your credit card issuer, you can also use the quarterly and yearly account summaries as references to your bookkeeping and accounting tasks.  Many business credit cards provide downloadable account summaries which you can use along with your accounting software.  These references will prove to be invaluable especially in filing your business taxes.  By checking out the exact items you’ve purchases, you can easily determine which ones can be written off from your taxes.

As we’ve said, one of the most important uses of business credit cards is helping you build credit.  How can you build a strong business credit with the use of your credit card?  By staying within your credit limit, using your credit card exclusively for business purposes, paying off your balances in full each month and by promptly submitting your payments.

Article Source: http://www.articlesbase.com/small-business-articles/business-credit-cards-for-business-financing-3117318.html

About the Author

Pamela Williams is a Loan Consultant, Internet Marketer, Writer and owner of BusinessCreditCardSite.com, a finance company Las Vegas Nevada providing support for businesses all across the US particularly with obtaining business credit cards. Visit www.BusinessCreditCardSite.com

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Apply for a Business Credit Card: 7 Mistakes to Avoid

Filed under: Business Credit Tips

At one point or another a small business owner will need to apply for a business credit card. While there are different types of cards to choose from each one has its own strengths and weaknesses.

One of the major factors that can have a serious impact on you personally is what is outlined in the fine print. Even though you are applying for a business credit card for your company the terms and conditions are what matter most.

Every small business owner should be aware of certain errors to avoid when applying for a credit card.

These mistakes have the potential of damaging your personal credit scores as well as putting your personal assets at risk.

While applying for a business credit card may not be the most exciting thing to do but it’s necessary and requires your careful attention to every part of the process.

First of all, when it comes to business credit cards there are six major types of applications with each requiring different types of information.

Some credit card issuers require a personal credit check and guarantee while others may only require a personal credit check if your company has a strong enough credit file that stands on its own.

In addition, some issuers may base its credit approval solely on the creditworthiness of your company which is what most small business owners should strive to achieve.

Let’s take a look at seven mistakes that you never want to make that can cost you money, damage your personal credit and put your personal assets at risk.

7 Mistakes to Avoid When You Apply for a Business Credit Card

1) Not conducting a credit assessment.

Before you apply for a business credit card you should be fully aware of where your credit stands on a personal and company level. Get copies of your personal credit reports and scores from the three consumer credit agencies as well as copies of your business credit files and scores with the three major business credit bureaus.

2) Applying for the wrong type of card.

You should understand the primary functions of the card you are applying for including its limitations. Choosing the best small business credit card requires a full understanding of all the types of cards that are available.

3) Failing to read the fine print.

Just because a business credit card offers all kinds of special perks and rewards doesn’t mean it’s necessarily the best card. Always read the fine print so you completely understand the terms and conditions of the credit card agreement.

4) Chasing teaser rates and special offers.

While promotional offers like a no-interest promo look really attractive most of them come with strings attached. Make sure you understand what conditions must be met and how long your teaser rate stays in effect

5) Applying for the wrong business credit card.

To protect your personal credit you should apply for cards that report your payment experience solely to your business credit files.

6) Providing a personal guarantee.

You can avoid a personal guarantee with specific credit card issuers if your business has established strong business credit files. You can also avoid supplying a PG with certain secured business credit cards.

7) Applying for too many cards.

Be selective on which cards to apply for because too many inquiries on your business and personal credit files can raise a red flag with creditors as well as negatively impact your personal credit scores.

So the next time you apply for a business credit card pay close attention to what you’re signing up for. Don’t get caught making mistakes that can now be easily avoided.

Article Source: http://www.articlesbase.com/finance-articles/apply-for-a-business-credit-card-7-mistakes-to-avoid-3424558.html

About the Author
About the Author Marco Carbajo is founder of the Business Credit Insider’s Circle. Looking to apply for a business credit card? Claim Marco’s popular FREE business credit seminar ($597 Value)! Follow Marco on Twitter @MarcoCarbajo.

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