Small businesses often rely on credit as a way to purchase inventory and supplies or to use in various ways that can help them further their business goals and initiatives, as businesses that rely on inventory and products will obviously need to constantly be purchasing in the hopes of increasing sales progressively down the road. Understandably, small business credit cards have been one way that numerous companies have often found not only the access to credit they need to keep their business running, but many business credit cards can offer perks and rewards that are beneficial to businesses as well.
Yet, there are numerous ways in which small business credit cards can differ not only from one card to another, but when it comes to differences in personal lines of credit and small business credit cards, there are also different rules that are in place which small business owners must review before seeking out a line of credit. While there are those who argue that small business owners may be more protected when using a personal credit card to make certain purchases for their business, it’s understandable that many entrepreneurs want to keep their business life totally separate from their personal finances, and for this reason small business credit card opportunities are often sought out by these businesses in need of credit to help them grow and prosper.
A Foxbusiness.com report recently made mention of various ways which the business credit cards may be different from each other or personal credit cards, and these factors must be considered when businesses seek to acquire credit for their company. As an example, the CARD Act banned certain practices by financial institutions in relation to consumer credit cards, but lenders can instantly raise rates on small business credit cards, may offer less time for cardholders to pay their bill, but have no limit on the amount that can be charged for late fees or over the limit fees, and even the application of payments may not be applied to small business credit card debts in the same way they are to consumer debts.
While these credit card acts by lenders are just a few of the practices that are not covered under the CARD Act in relation to small business credit cards, this by no means has been a reason for business owners to avoid acquiring a small business credit card. While there are some drawbacks to a small business card, mainly a lack of protection for the cardholder in certain areas, there are also benefits which are tailored specifically to small businesses, like rewards that may be offered and discounts that could be applied towards business products.
Essentially, business owners who are looking for a small business credit card option have been prompted to heavily researched the offers that are available, look for any hidden fees or costs that may be associated with their card, and explore reward programs that may be beneficial for their particular business’s situation. While there are fewer protections on business credit cards and consumer cards, most reputable lenders will not cause undue stress for a small business who simply practices smart purchasing and repayment habits, as a good cardholder who implements these practices, typically, will be able to view their small business card as an asset rather than a liability.