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[B1026]Business Credit Cards Personal Guarantee

by Jon T Norwood, Jon

With the number of small and home businesses growing at such an incredible rate, it is no surprise that business credit cards are making more of a showing these days in the market place. It was not long ago that small business owners had to depend on small credit lines or business loans from banks to manage cash flow on a monthly basis, which could be tedious and costly. This meant spending more time doing paperwork for the bank, and less time managing the business.

The release of business credit cards has helped to alleviate these problems. About 65% of all small businesses are currently using business cards, and this number is only going to increase. Most major creditors now have a business credit card offering, and availability is increasing by the moment.

Business credit cards bring several powerful advantages to the table for the small business owner, including:

Cash Flow Management - The number one concern of almost every business owner is cash flow. A bad month can bring down an entire quarter is the business has no means to float itself through a rough time. Business credit cards can be a key element in making through a rough patch.

Credit Rating Increase - The credit rating of a business can mean more than just financing. Customers may not want to do business with a firm that has a poor credit history, and corporate growth will most certainly be delayed if not stopped entirely. Business credit cards used in a responsible way can help build the overall credit rating of the firm, as well as help open new avenues of financing down he road.

Spending Control ? Giving employees the ability to make purchases for the company on the fly can help streamline day to day business. This of course can also open the door to inappropriate expenditures, or simply over spending on needed items. With a little management these problems can be easily overcome, and recording as well as reporting corporate spending will be all the better for it.

Business Taxes ? For home based and small businesses credit cards offer the opportunity to consolidate all corporate spending. While a larger business would be hard pressed to do this, there is no reason every business expense incurred by a small business couldn't be placed on a credit card. This means all corporate spending is managed through one sources, and when tax time comes around it is a simple matter to record.

Rewards Programs ? Using a business credit card to manage all corporate spending is a good way to earn bonus packages from rewards cards. Air miles and cash back incentive programs really add up if you are routing your business spending through one card.

Business credit cards are an indirect way to help solidify your firm in the mind of your client. Take them to lunch and pay with the corporate card. This shows a certain level of stability and depth to a possibly new firm, and also helps to increase your credibility.

From cash flow to taxes, to a greater level of spending control, business credit cards provide a valuable service to any size firm. As with all credit cards, care must be taking when managing their usage. For all the good they can do for a business, they can also cause problems when mishandled.

Business cards still have an application and approval process, still include an interest rate on spending, and still have an impact on credit scores. They are available with low APR, zero introductory interest rates, balance transfer options, rewards, like airline miles or cash back, and so forth. Business credit cards are similar to personal credit cards in how they are obtained, how they are used, and how they function, however business credit cards also offer distinct business oriented benefits and usually offer high lines of credit. They also offer travel discounts on cars and hotels, travel insurance, and even restaurant savings. The fact of the matter is, business credit cards will help your business grow and there is no doubt about it.

Business owners also understand that securing a business credit card early on in the life of the business, helps the business to build its credit track record; and that the earlier a track record is established, the sooner the business will be able to carry the business credit card liabilities on its own. These cards have slowly become one of the most common forms of business credit that assists businesses meet their urgent requirements, even when there is a minimum of cash. Businesses, both large and small, are no different from private consumers when it comes to the benefits of credit cards, and many businesses rely on the convenience and flexibility of these cards in order to aid the smooth running of their companies.

Business credit cards frequently secure preferential exchange rates to the business traveler and business credit card issuers also arrange for worldwide emergency and travel assistance. Currently, business credit cards offering zero percent interest rates and reward rich incentives are advertised widely and these types of business cards are going to be more widely marketed to small business owners in upcoming months.

Business credit cards are accepted virtually everywhere, which is great for those who need equipment or supplies in a hurry. Business credit cards are usually issued to corporate executives or business owners in order to more easily keep business expenses separate from personal charges. Business cards for businesses in general, and for small business specifically, have become increasingly popular as more and more businesses start to realize the benefits. Business credit card volume has grown considerably since 2000 and business cards can be issued to more than one individual. They are a great way to increase cash flow and solve cash flow problems.

Business Credit Cards are great financial tools for all types of business. But there are drawbacks to small-business credit card usage as well. A business credit card carries the same personal liability as a personal card. So if the business defaults on credit-card payments, a credit card issuer can come after the person who signed the card for payment. Also, your small-business credit card will be noted on your personal credit reports and a few late payments could seriously damage your personal credit score, and a big debt increase by the business could make you look more overextended than you really are, regardless of the payment history. Still, no matter what, once your business has established its own credit history, you should be able to remove your small-business credit card from your personal credit reports. One other word of caution: because business credit cards are meant to be used by companies, not consumers, they come with fewer consumer protections than a personal credit card.

From the above, you can see that the vote is in. Business credit cards are wonderful financial tools for all types of businesses. And, if you do not have one for your business today, perhaps you should consider getting one in the near future. After all, financial tools that come with great features and benefits are a business necessity.

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Both Jon T Norwood & Angelknight are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Jon T Norwood has sinced written about articles on various topics from Computers and The Internet, Credit Cards and Airline Credit Cards. Jon Norwood is a managing partner of Bank Card Finder, a site dedicated to providing helpful information that consumers need to compare credit cards and apply for