It is recommended that you contract credit with your local financial institution/bank. Once you have established a relationship with them, you should consider applying there for your business credit card so that you can continue to invest in that relationship. If your bank is familiar with you, you will get better deals. On the other hand, as they get to know you better, you will reap the fruits of this relationship when you apply for credit with them. Loyalty always pays off.
You should carefully read your contract when getting your business credit card. Some companies tend to hide some rather significant details in the fine print. Look for the levels of interest rates and if you are required to pay an annual fee with your business credit card. Make sure that you fully read and understand all the terms and conditions. Do no be afraid to ask for more information, after all, it is your money you are putting on the line.
You should also look into the services that the credit card company offers with the business credit card. Do not get swept away by offers that include frequent flyer miles or other discounts (although these to can help your business). On the long run, a more important part can be played by consumer services like detailed account reports or 24-hour customer service.
Once you find a card that you are happy with, you should stick with that business credit card. This is the reason why you should carefully study the offers on the market before applying for one. It is better to think on a long term basis and predict your company needs on a longer period so that you will not have to change the business credit card in a year because it no longer suites your business needs.
You will constantly receive offers that might look great at first, but you shouldn't switch if you are content with your current business card issuer. Switching will not look great on your credit profile when you will be on the look for funding.
You should not mix your personal expenses with the business related ones. In case that you get audited, expenses that you cannot account for within the company will raise suspicion so even if you are tempted to always charge it on the company, don't.
Try not to build up a collection of business credit cards. Using fewer credit cards will help you keep track of the business expenses and keep you away from any unpleasant surprises that may arise at the end of the month when all the accounts are cumulated. It is best to keep a positive activity on the credit account for obvious reasons. Before charging any expenses on the business credit card, you should question yourself if that expense is really necessary for the company.
Credit card terms are easy to learn and understand. Any one who owns a credit card or plans to get a credit card for the first time must be familiar with credit card terms. One must not apply for a credit card unless he is fully qualified with credit card terms, especially when it involves your business.
Anyone who does not understand how credit cards work must first make himself familiar with the credit card terms, including, how to purchase items with it; how to read monthly billing statements and fully understand the rules of payment. However, it is not very difficult to learn about using credit card responsibly.
For a new credit card owner, reading the credit card literature and dealing with credit card purchases is not an easy task. Hence, achieving and keeping a good credit score, and getting into a large and unmanageable amount of dept, depends upon how good a credit card owner understands the terms associated with the credit card. As a business owner you should understand how debt may affect your business; however it is also true that some savvy business persons choose to use credit cards to create short term liquidity. This should only be done by someone who firmly knows what they are doing.
Average Daily Balance
Balance on the credit card divided by the total number of days in that particular month is average daily balance. This average daily balance is then used for interest calculations which are charged to the credit card holder on each month's bill.
Annual Percentage Rate
Some times referred to as APR, is the annual percentage rate on a credit card. In other words it is the amount that must be paid by the credit card holder as the interest rate. This interest rate is paid in addition to the cost of purchases made through the credit card.
Balance Transfer
Transferring balance from one credit card to another is called balance transfer. Credit card holders use balance transfer to lower interest rates on their balance.
Finance Charge
It is the amount of money that the card holder must pay in addition to the total due for purchases. This amount is calculated by interest rate and the purchase balance on the card.
Pre-Approval
This term is seen on different mails sent to the people. This term indicates that the particular recipient has a good chance of getting a credit card. But it is does not guarantee that the recipient will get a credit card.
Variable Interest Rate
This is the percentage that the credit card holder must pay in order to retain credit card balance. This interest rate is variable because it depends upon the current national interest rate level.
Card Holder Agreement
The detailed terms and condition of the credit card, including the interest rate associated with the card, its description, other fees and charges etc.
Minimum Payment
Every month the credit card holder receives a bill. This bill also specifies a minimum payment, which must be paid in order to retain credit card. This is usually a very small amount. Monthly bill indicates the purchases, the card holder has made the previous month.
There are many other credit card terms which are not covered in this article. This article only focuses on important terms. To see the details of these terms and all the other terms, one can always search the internet.
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