Decisions abound for entrepreneurs and small business owners. Prioritizing where to turn your attention can often be overwhelming, but one choice that doesn’t have to be difficult and should never be treated as an afterthought is picking a business credit card.
The right business credit card can help you keep better track of employee spending habits; allow you to become proactive, rather than reactive when making purchasing decisions; and create opportunities to save your business money.
How do you know what credit card is right for your business? FAB&T offers these tips to help you sort through one of the most important decisions you can make as an entrepreneur.
1. Track Your Spending
Identifying your consistent business expenditures is something you should be doing anyway. By making an intentional effort to examine where you are spending, you can pinpoint the type of credit card you need. Like your business, each credit card is unique. Do you need a card that rewards you for air travel or hotel stays? Are you preparing for capital expenditures, or do you often take clients out to dinner? Knowing where you spend matters.
2. Treat Yourself
Pay attention to the benefits that come with each card. Beyond the rewards points or the APR (annual percentage rate), look at what additional benefits the card offers. Does your card include discounts for entertainment? What about discounted business payroll, tax or accounting software? Is there an option that provides extra protection for company cell phones? Car rental insurance? Here’s where the right card can SAVE your business money.
3. Know the Numbers
Some business credit cards can cause sticker shock when you get that first glimpse of the annual fee. But it’s important to note that higher annual fees often accompany better rewards and benefits that can help you cut expenses elsewhere.
If you frequently make purchases outside of the United States, be sure to choose a credit card that doesn’t add on costly international fees. If you are likely to carry a balance and not pay debts monthly, the APR is the most important number to consider. Interest rates can compound quickly.
4. Get Personal
Your personal credit score likely matters when choosing a commercial credit card option. Depending on your corporate structure and business size, you could be asked to personally guarantee your company cards.
Likewise, it’s important to keep in mind that how you use your business card can affect your personal credit score. If you know your personal spending habits can be undisciplined, look for a card that acts as a money management partner, helping you track spending and your company’s overall financial picture.