Businesses currently looking for financing opportunities that will allow them more options when it comes to purchasing items or supplies have been looking into credit cards as one potential method of getting the financing they need, simple because a loan or a one-time investment may not meet the needs of a business where a revolving line of credit could be best. Yet, current costs that businesses may face as a result of rates that are presently in place on small business credit cards may warrant some consideration as to whether small businesses opt for a business credit card at the present time, or if they feel that the card will be right for their situation, there are some factors that also need to be explored that are offered within different credit card options.
At the current time, many rates on business credit cards are averaging anywhere between 12% to 20%, but this will obviously vary depending on a business’s financial position and the lender they choose to work with when it comes to getting one of these cards. Yet, businesses need to understand how a rate will impact their company and how they plan to use this particular card to meet their needs.
Obviously, if businesses only use this card sporadically throughout the year, and make great strides to keep their debt low and pay off their balance quickly, an interest rate may not have as much of an impact on a company in this situation, as opposed to a business that plans to carry a balance on their credit card throughout the year. Also, when it comes to looking at costs, some businesses may have to meet higher fees on their credit card, particularly if certain small business perks and benefits are in place.
There are companies that may be able to take advantage of certain rewards offered on business credit cards, like cash-back opportunities or some may have a credit card simply as a way to better track their purchases, but business owners need to understand that even if a rate of 12% or lower is offered on a particular card, yearly fees or the simple overall costs that may come with carrying a balance may be a problem for certain businesses, and must be considered before a company decides what card they choose or whether using a credit card will be in their best interests.
Currently, there are still businesses looking for opportunities for loans or one-time borrowing options that may better suit their long-term goals and current financial position, so advisers are currently urging businesses looking into these small business credit cards to make sure that they understand how this card will affect the company, if this is the type of credit they need, and business owners must make sure that they get a card whose interest rates, fees, and incentives will be right for the business and its future goals.