| The first thrill about starting a new enterprise is seeing | | | | need it. There are various other features that you do |
| the name of your creation on a business card. You | | | | want: overdraft protection, 24-hour customer service, |
| want to hand them out to everyone you see friends, | | | | and detailed account reports for your business. In the |
| family, the kid who bags your groceries. Soon after | | | | long run, these services are far more important |
| youve registered your trade name, the credit card | | | | business benefits than frequent flyer miles or discounts |
| offers start cluttering your mailbox. Its flattering at first. | | | | on rental cars that are often accompanied by |
| You imagine going out to dinner, grabbing the check, | | | | numerous restrictions of their own. |
| and saying, its okay, its on the company. So you fill out | | | | * Find a card and stick with it. With all the offers of |
| one or two pre-approved applications and, like your | | | | lower interest rates and appealing incentives, you might |
| business card, cant wait to use this little symbol of | | | | be tempted to switch your account from one issuer to |
| acknowledgement. A corporate card tells people | | | | another. Unless you are dissatisfied with your credit |
| youve arrived. Youre a legitimate business. | | | | card company, stay put. Card hopping shows up on |
| But it can also spell trouble. | | | | your credit profile and will likely be unimpressive to a |
| The purpose of a business credit card is to have the | | | | prospective lender. Use your valuable time to manage |
| convenience of charging legitimate business expenses. | | | | your business instead of pitting one credit card |
| You avoid using a personal credit card and submitting | | | | company against another. |
| receipts for reimbursement. You have the ability of | | | | * Do not mix business with pleasure. A business credit |
| making online and telephone purchases to expedite | | | | card is intended for business purchases only. In the |
| shipment. The revolving account helps you plan your | | | | event of an IRS audit and they do occur via random |
| cash flow. The statements provide a detailed | | | | selection questionable expenses will raise suspicion. |
| accounting record. | | | | * You dont need a deck of cards. You shouldnt require |
| Used wisely, a business credit card provides these | | | | more than one or two major credit cards for your |
| important benefits and is essential to building your | | | | business. The more credit cards you accumulate, the |
| corporate credit profile. Demonstrating reasonable | | | | higher your debt potential. You charge a hundred |
| usage and maintaining a good payment history not only | | | | dollars at the office supply store, then charge |
| allows you to gain more credit, but also helps you | | | | computer equipment with another account, and maybe |
| negotiate better interest rates on loans, lines of credit, | | | | pay for gas, meals, and a nice little antique table for |
| and other revolving accounts. In fact, using a credit | | | | your conference room on your corporate bank card. |
| card properly is better than paying cash because | | | | Theres still room on each card, so youre okay. But |
| lenders want to see a credit profile with positive | | | | when the monthly bills come, the totals come as a |
| activity. One small business owner had been vigilant | | | | surprise. You can only make a minimum payment so |
| about paying cash for all his purchases to avoid having | | | | the finance charges will start to kick in. By keeping |
| monthly bills. He had had some personal credit issues in | | | | track of the expenses as you make them you wont |
| the past and was determined to avoid a recurrence. | | | | heap up a debt that puts a stranglehold on your |
| He felt great about keeping his costs under control. | | | | accounts payables. Whenever you take that card out |
| When the owner applied for a business loan at the | | | | of your wallet, ask yourself if the purchase is |
| local bank, he was advised that the black marks on his | | | | necessary and valid for the company. |
| profile were minor. The biggest problem was that he | | | | * A credit card is not a loan. The account should not |
| had no recent credit history. So, he got a credit card, | | | | be viewed as a source of funding when cash flow is |
| budgeted a monthly allowance for the payment, and | | | | tight. The interest rates and transaction fees are too |
| made small purchases to establish reports on his credit | | | | high! Avoid taking advantage of the cash advance |
| profile. | | | | option. If you are resorting to borrowing from your |
| A business credit account is clearly valuable for a lot | | | | credit card, chances are youre not going to be able to |
| of functions. What it isnt is a license to spend without | | | | pay the bill when it comes due. |
| regard to the consequences. Just because youre not | | | | * Limit the number of users. A company credit card is |
| writing a check doesnt mean you havent spent | | | | as much a demonstration of trust as it is a |
| corporate cash. By following some basic guidelines, | | | | convenience for the user. The bookkeeping for multiple |
| you can manage your corporate credit card account | | | | cards can be a nightmare, however. Before applying |
| so you reap the rewards instead of paying the price. | | | | for a card, make sure you can get itemized reports |
| * Get credit from your own bank. Once you establish | | | | for each card so your frustrated bookkeeper doesnt |
| a business banking relationship with a local financial | | | | have to chase down people to identify charges. To |
| institution, continue to grow that relationship by applying | | | | avoid excesses, specify to the employee how much |
| for your business credit card at the same place. The | | | | and what type of charges will be acceptable. Review |
| more business you do with this bank, the more they | | | | the monthly statements to verify that the cards are |
| get to know you. The comfort level increases the | | | | being use appropriately. |
| likelihood that they will consider your request for | | | | A business credit card is an essential tool to manage |
| funding when the time arises. Show loyalty to them | | | | your finances and get the items you need on a timely |
| and it will be repaid in kind. | | | | basis. In order to take full advantage of the benefits, |
| * Read the fine print. Many credit card companies | | | | choose your credit card company wisely, making sure |
| shout out low introductory rates. The key word here is | | | | you understand the services and the limitations. Be |
| introductory. After the honeymoon period is over, the | | | | clear about how the card will be used. Credit cards |
| rate can shoot up above the interest youre paying on | | | | follow a basic law of physics: for every action (a |
| your current card. There might be hidden fees that can | | | | purchase) there is an equal and opposite reaction (a |
| rack up the bottom line on your monthly statement. | | | | bill). By getting proactive about the company credit |
| Look for an annual fee, the first sign that this card is | | | | card, you can keep your finances in balance, boost |
| going to cost you money. If you have to pay for the | | | | your credit profile, and enjoy a terrific convenience. |
| privilege of having the card, chances are you dont | | | | |