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