New Small Businesses - Are Credit Cards Worth It?

A new small business credit card can provide you with a lot of perks. Although some find them to be more trouble than they are worth there are quite a few different reasons to consider one. There are other options available for you other than a small business credit card. It’s up to you to decide which option works best for you and your businesses needs. Below is a list of the pros and cons with business credit cards as well as other options that are available to you.

Why Credit Cards?

Credit card services for small business vary from bank to bank. Be sure to do your homework and shop around before you make any decisions. Some credit card companies will provide to you incentives such as airline travel points, discounts and more. This is done whenever you purchase anything for your business with your credit card. Having a credit card that is separate from your own personal account is always a good idea as it allows you to be able to keep your finances more organized. This will come in handy later for taxes and to get a better understanding about the worth of your business. Bad credit does not always mean that you will not be able to get a credit card. You will probably have a higher interest if you do end up getting approved. Credit cards of course are much easier to pay vendors and bills with. They also help you to build your credit up and get it established to improve your interest rates.

Why Not Credit Cards?

When you have a credit card used for your small business then you are going to end up with a higher interest rate. If you are ever late on a payment then the interest is going to sky rocket. Also a small business credit card does not always provide you with the same amount of security that a regular personal credit card does. If you are using a small business credit card you are more vulnerable to theft. At any time your interest rate can change. It all depends on how you are managing your account. If for any reason there are problems with your business credit card, a missed payment or anything that can hurt your business credit can also harm your personal credit.

Other Options

A small business credit card isn’t the only way that you can get money for your business. There are other options available you can use. A line of credit is similar to a loan. This is a fixed amount of money that will be given to you. The interest rates are usually lower but again, it is a fixed amount. This means that if you end up needing more money you will have to go through getting another loan but only after you have finished paying off the first. This is why credit cards are generally more popular. That and you generally don’t need to hold up collateral in order to get a credit card.

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