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What You Need to Know about Credit Cards

Nick Makaryk
Aug 7, 2008
Using a business credit card can be a great thing. It can help you keep a close eye on expenditures. If you have a business credit card, your accountant may very well applaud you. A credit card can greatly help lighten your accountant's workload and he or she will have a lot less work to do than with cash transactions when it comes time to prepare your tax paperwork.

However, no matter why you choose to have a business credit card, there are still some things you need to know. For example, annual fees for business credit cards are generally higher than those for personal credit cards.

Annual fees can easily reach $150 per year, plus extras. If you only need a credit card to make simple purchases, pick a card with an introductory "interest free" time period.

Cards with an introductory interest free period don't charge interest during this time. This time usually lasts anywhere from a month to 12 months. This can be great news for you as a business, especially if you are new and have setup expenses to deal with. Because of this, a card like this can generally be looked at as an interest free loan.

When a payment is due, your statement will show it. The date on the statement is the last day your payment can be received by the credit card company. Cards such as American Express require that you pay your entire balance every month. Take a very close look at any terms of credit cards before you sign up for one. If you miss the card's payment due date, you'll be charged a late fee in addition to your existing balance. In addition, if your card is not an interest free or fixed rate card, you'll also probably be given an increased APR because of your late payment.

Your APR, or annual percentage rate, is the interest you are charged on the outstanding balance of your credit card. Because of this, it's much better to get a fixed-rate card, generally, instead of a variable one. With a fixed-rate card, a credit card company will not be able to charge you a higher interest rate because of a late payment. This is also going to help you keep an eye on your budget. Don't let having one card stop you from looking around for a new low rate introductory credit card or for a new interest free credit card if your current interest rates on your card are very high. Oftentimes, you can transfer balances on a card. This is an incentive companies provide to entice you take out a new card. This can save you a lot of money over the long run, provided you use it right.

It may be true that at some point, you'll need to face a problem with a business credit card. In this case, you'll need information quickly. Many companies have a website with a frequently asked questions page. This is a great place to start when you need questions answered. More than likely, someone else has already faced an issue similar to yours, so that your answers will be right there. Most companies will also provide a phone number so that you can talk with a customer service representative over the phone; most of these companies also have the ability to talk to a customer service representative via an online messenger program directly on their website. Try one or both of these methods out and see what customer service response is before you agree to sign up for a certain card.

If you need to apply for business credit card, be smart. If you have a small DBA business, it's likely that you don't need a credit card at all. However, make sure you manage your credit card effectively so that you don't negatively impact your credit score by poorly managing your business credit card charges.
About the Author
Nick Makaryk is an Internet Publisher, Copywriter, and Founder of Best Credit Cards A Free consumer Credit Card Comparison site helps consumer minded individuals find the perfect credit card while avoiding high interest rates, charges, and no fees. Compare all Low Interest Credit Cards from accredited card issuers Visa, Master Cards, Discover, American Express.
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