Plastic rules. 90% of all small business owners have realized this and make use of credit card convenience on a day-to-day basis. According to a survey of small business credit card holders, which was released by SurePayroll in April 2007, small business owners are far more circumspect than the average personal credit card consumer in managing their credit card accounts. However, there is more to managing credit cards than simply paying on time. Optimizing your business' cash flow and minimizing your credit interest payments are also important considerations. We will use the American Express Blue for Business credit card as an example.
Optimize your Cash Flow with American Express Blue for Business Optimizing cash flow entails buying as much time as possible between receiving goods or services and paying for these goods or services. To achieve this, you could typically negotiate with a supplier to pay them within 30 days of receiving their invoice, instead of 15. Then, when their payment falls due, you could pay the invoice with your American Express Blue for Business credit card. Your American Express Blue for Business credit card offers a 25 day interest free grace period from date of purchase. If you pay the amount on your American Express Blue for Business credit card on the last interest free grace day, you will effectively have enjoyed 55 day terms on the goods or services you received. This should have a positive impact on your cash flow. Minimize your Credit Interest with American Express Blue for Business Introductory Period For new customers, American Express Blue for Business offers a 0% APR on purchases for the first twelve months. This means that your business will bear no interest burden, even if you need to carry a balance during this period. In addition to this, you can effect balance transfers at a 4.99% APR that will apply for the life of the balance. This exceptionally low interest rate on the American Express Blue for Business credit card makes it perfect for consolidation purposes.
Line of Credit Paying the full balance on your American Express Blue for Business credit card, or any other credit card for that matter, is and remains a good practice. Having said this, small businesses do need extra cash from time to time: a big customer might make a late payment or an unforeseen breakage could deplete the last of your cash reserves. Whilst the American Express Blue for Business credit card offers a very low interest rate 11.24% APR on purchases, cash advances come at a hefty 23.24% APR.
Fortunately, there is an alternative option: the American Express Business Line of Credit. This line of credit ($10,000 to $100,000) is only available if you hold an American Express business credit card, and was designed to offer small business owners the credit flexibility needed when trying to grow a business. This add-on to your American Express Blue for Business credit card comes at a 10.24% APR ? even on your cash requirements. If you access the line of credit with your American Express Blue for Business credit card, you will still earn your reward points.
To conclude The business credit card is an indispensable financial tool. If wisely managed and if the underlying benefits are effectively employed, it could become a sustainable and cost effective source of working capital for your business.
Although credit cards are widely used by small businesses, it is surprising how many of these cards are personal - and not business credit cards. Perhaps one of the reasons for this is that a very large portion of small businesses (unverified sources claim 75%) are one-person concerns. Perhaps another reason is that these business owners could be unaware of the value that could be unlocked by using business - instead of personal cards.
The credit card industry has been industrious in their courting of the small business owner, with each of the issuers trying to outmaneuver the other where terms, benefits and features are concerned. Some of the cards, such as American Express Blue for Business, have even added business consulting and interactive business forums to their offering in an attempt to entice small business owners to transition from personal to business credit cards. When you do get down to comparing business credit cards, you will probably find that the American Express Blue for Business credit card is one of the most preferred business credit cards on offer in the market today. This is why:
-Balance Transfer: If you transfer your existing credit card's balance to an American Express Blue for Business credit card, the amount transferred carries a low 4.99% APR for life. If you have been using your personal credit card, you could consider moving the amounts you charged on behalf of the business to the American Express Blue for Business card. It is the perfect opportunity to split your business and personal expenses.
-Introductory Offer: For the first twelve months after becoming an American Express Blue for Business credit card holder, you pay a 0% APR on purchases.
-Fees: In spite of the fact that the American Express Blue for Business card is also a rewards card, it carries no annual fee.
-Low APR: After the introductory period, a low APR of 11.24% applies to purchases made with your American Express Blue for Business card.
-Grace Period: The American Express Blue for Business card offers a 25 day grace period. Used correctly, this will ?buy? you extra time of up to 55 days: Your creditors? grace periods (i.e. 30 days) + American Express Blue for Business grace period (i.e. 25 days).
In a nutshell, the American Express Blue for Business credit card enables you to: repay existing outstanding credit card debt over an extended period of time at a very low interest rate; it affords you an interest free loan during the 12-month 0% purchase APR introductory period; and it improves your cash flow through the 25 day interest free grace period offered.
The American Express Blue for Business credit card is the logical card to migrate to for small business owners. The product composition is small business supportive in every respect. The American Express Blue for Business credit card offers affordable interest rates, worthwhile rewards, financial reporting and business centre support, amongst others. There is precious little more a small business owner can ask for from a business credit card.
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