Business owners who are currently looking for financing may be seeking out small business loans as a way to meet certain financial needs and inject capital into their company which will hopefully lead to more prosperity in the future, but there are some who are looking for financing through revolving lines of credit like a small business credit card, and are currently in the process of researching credit card offers and comparing costs and rates that are currently available on small business credit cards. Yet, when it comes to getting an affordable rate on a card and simply the right card for a particular business, many advisers want businesses to dig deeper rather than settling for cards that that may offer benefits or perks that the company simply does not need.
However, currently we are seeing rates here in September on these business credit cards around 12% to 20%, but this is by no means a range that is set in stone due to the fact that each company may qualify for either a lower or higher rate, depending on their financial position. Yet, businesses are being offered certain types of credit cards, like those that may offer reward points or cash back opportunities to small business owners, and these can be attractive for the company that is small and simply looking for ways to cut costs or have their charges earn money.
While charges that can lead to cash back bonuses might be helpful for some companies, as could airline bonus miles or other perks that are often advertised to small businesses, it’s important for a small business owner to look at fees that are charged on an annual basis, whether these add-ons to their small business credit card could lead to higher costs, and there are some advisers who are asking that small businesses make sure that a credit card will be in their best financial interest, in terms of lines of credit for their company.
Some argue that a business should not rely on a credit card to make purchases, particularly when these purchases are like inventory, equipment, and supplies due to the fact that some advisers feel that a business should be able to make these purchases with profits they earn, rather than using a small business credit card that can cause these overall costs to be higher as they will be repaying on these charges with interest.
However, it is understandable that certain businesses are looking to improve their credit standing and build a more positive credit history, so if proper purchases and prompt repayments, which can keep interest rate payments low, are used when a business makes charges on their small business credit card, it has been beneficial for some in the past. Ultimately, it comes down to whether a small business owner feels a credit card will be useful for their operation and it will then take homework and research, as well as reading the fine print on credit card offers, before the right small business credit card may be found, but again it could benefit a company to question why they are seeking a line of credit and explore multiple lines of credit to make sure they are getting the best offer at the most affordable cost for their company.