Choosing the right credit card for a business is a critical decision that can have long lasting financial impacts on the company. With the various number of cards available today, the company should ensure they identify their needs and be sure to select the best business credit cards. Evaluating a few simple pieces of information can help a business sort through the sea of top credit cards available.
The interest rate offered on the card is the single most important consideration if the company is not planning to pay off the balance of the card every month. Most businesses can charge a considerable amount in a short period of time when ordering supplies or paying for other business functions. On high balances, even a few points in interest can cost the company a considerable amount every month. If the balance is paid every month, this is less of a consideration.
Before selecting a card, the business should also consider what the card is going to be used for and determine a desired limit that will comfortably handle the expected expenses. Credit ratings can be lowered when cards are used close to their maximum limit. The company should ensure the available credit on the card exceeds the amount they need it for by at least 25%.
A hidden expense that is not always considered is fees. Some cards have a yearly fee, especially those that have substantial reward programs. The fee can range from $25 to $100 depending on the type of card chosen. This fee should be taken into consideration when selecting a card.
Almost all new cards offer some sort of rewards program. The types of rewards, the size of rewards, and the amount required to obtain a reward will vary between cards. A popular reward for businesses is travel. The travel rewards can help the company reduce travel expenses for required travel of its personnel. When reviewing potential cards to use, a company should consider what rewards are important to them and the required spending on the card to obtain the reward.
A feature that is popular with most accounting departments is expense tracking. Some cards offer detailed breakdowns of how the card is used and what percentage is spent on different items. This can be helpful when budgeting for future expenses and for understanding how the company spends its money.
With all the available top credit cards it is easy to get overwhelmed with the choices. However, by dividing the cards into categories shown above, a company can quickly sift through the information and determine which cards are the best business credit cards for them.