Small Business Credit Cards

The marketing of small business credit cards has increased significantly with a wealth of new credit card offerings. These special cards represent a great opportunity for issuers at a time when the broader corporate market has been sluggish.

Most small business owners still don't use credit cards and this represents a huge market for card issuers. According to a jointly sponsored survey by Visa and SCORE (a nonprofit small-business counselor), only 21% of small business owners use credit cards.

Consequently, credit card companies are attempting to sign up millions of business owners by offering substantial advantages for entrepreneurs. Examples include MasterCard's new line of industry-specific credit cards, Discover Card's first small business card, and American Express's upscale events.

In 2005, MasterCard began permitting cardholders to use a signature-free payment system called PayPass, which tracks receipts for small business owners. Also, it introduced a card that provides construction companies with an extra month to pay bills, since construction companies need to pay vendors before getting paid themselves.

American Express, the established leader in the small business credit cards market, has responded aggressively to the competition. Its small business credit cards already had no pre-set spending limits, but it has improved its rewards programs and added unique networking events for its Open card members.

Discover launched its first small business card last June. Their small business credit cards offer credit limits up to $50,000, as well as downloadable quarterly statements. Additionally, cardholders can change the credit limit on employee cards online and pay those vendors with purchase checks who don't take credit cards.

Visa has linked credit and debit accounts for its business cards and is working to get more suppliers such as landlords, utilities and vendors to accept credit cards.

Credit cards are an important option for entrepreneurs looking to get their new business off the ground. Getting money for your business using small business credit cards can be a vital piece of the puzzle, together with other necessary elements of a complete business plan.

Business credit cards represent a good choice for an entrepreneur looking for funding. In fact, a business credit card is probably the easiest and quickest way to get business financing. Nevertheless, small business owners should keep in mind that credit cards have higher interest rates than other types of loans.

Even if you have incorporated your company, almost all credit card companies will insist that you assume personal responsibility for the debt. A small business credit card is like most financial instruments... it must be used responsibly. Misuse of your business credit makes you personally liable in most cases and has the potential to destroy your business.

Another advantage of small business credit cards is they help make bookkeeping easier. All transactions and receipts will be itemized by the card company thereby helping the business maintain more accurate financial reports.

Avoid the tendency to co-mingle your business and personal transactions because this will only creates potential tax and money management problems. Using small business credit cards for business only purposes will help to confirm that your business is legitimate.

By the way, even small businesses are eligible to apply for low interest credit cards.  When managed prudently, this can save your business a lot of money.

Small business credit cards can be helpful for your entrepreneurial enterprise. Just remember to treat your business credit card ownership as a privilege to enjoy many years of profitable business growth.