One of the most important necessities for a business is a credit card. The credit card will give a boost to your business since it will help you establish credibility and build the credit history for the business. Applying for this card is a very important decision that you will be making for your business. Hence, there are some facts that you need to be aware of before getting it. Though the benefits of these cards cannot be denied, there are a few limitations that you will need to know as well.
If you are applying a business credit card in the name of the most recently set up business, then, you are surely not going to have a business history to back you. You will have to stand guarantee to the credit card. if you want your application approved at the earliest, then, you should have a good credit score to your backing. The good part is that since the credit card issued for your business will carry its name on it, it will make your business appear credible and legitimate. But be prepared to have this card linked to your personal credit history if there is no business history to back you.
The other challenge that one faces with business credit cards is that they are riskier than the ones for regular personal use. This is because in the case of personal cards, customers are protected by various laws to a certain extent. However, in the case of business credit cards, there are not many laws that can safeguard you against many aspects like overspending on it. You will have to track your account constantly to ensure you are within the limits offered.
The interest rate of business credit cards is much higher than the ones for personal use. Hence, be prepared to pay an arm and a leg if you use it liberally without any restraint. Never ever consider opting for cash advances on your business credit card until you have no choice. there are many people who embark on a business dependent on the credit card without cash reserves. If you are one among them, ensure you put the card to effective use and repay the dues on time. Else, it will not only impact the credibility of your business, but also curtail its expansion and your future requests for business loans.