Choosing the Right Business Credit Card for Your Company
If you are in the process of shopping for your first business credit card, then you have no doubt come across every type of card offer in your search. But, while these business credit card offers are each tempting in their own way, which type of card and key features will benefit your business most?
Understanding these offers and their key benefit features will help you choose the best card for your company. Here is some insight into the four most commonly offered business credit card features.
Reward Credit Cards
A reward credit card accumulates points for every purchase made on the card. The cardholder can then redeem their points for whatever the rewards program offers. This can be merchandise, airline tickets, office supplies, or a wide range of other benefits and discounts.
While these types of cards can provide an entrepreneur with valuable cost-saving benefits, they do tend to carry higher than average interest rates and most usually charge some type of annual fee. It is important to understand that if you plan on carrying a balance, then this type of card could cost you more in interest.
But, if you are planning on paying the card balance off every month, then you will be able to avoid the interest while taking advantage of the benefits.
Co-Branded Credit Cards
A co-branded credit card is one in which the issuer has partnered with another company in order to offer rewards that are specific to that organization. These cards work much like other rewards credit cards, but the reward points are usually only redeemable with the co-branded organization.
If your business utilizes a certain organization’s services frequently, such as in using a particular airline, then this type of card can save your company money. Of course, like other rewards cards, these cards also carry high interest rates and annual fees, so make sure you can pay the card off every month in order to take advantage of what these cards have to offer.
Cash-Back Credit Cards
A cash-back business credit card issues cash back to the cardholder based on the total accumulated dollar transactions on the card per month. The cash you get back can help offset the often higher than average interest rates these cards tend to charge. Or, if you can pay the card balance off before the due date, then the cash rewards will be issued in check form for depositing into your business bank account. Like other reward cards, cash-back credit cards usually charge an annual fee.
Teaser-Rate APR Credit Cards
Also called introductory cards, teaser-rate APR credit cards offer little-to-no interest on purchases for a specified period of time after the card is first issued. Once the introductory rate period is over, the credit card’s APR will be adjusted to its normal rate.
These cards are commonly used by entrepreneurs looking to transfer balances from other cards with higher interest rates in order to save money on APR charges. When considering these types of cards, it is important to read the agreement thoroughly so you know exactly how long the introductory period lasts and what the APR will jump to when it does.