By KELLY K. SPORS
For small businesses, credit cards offer tremendous value — from helping finance big purchases and keeping better tabs on expenses to giving a little extra time to pay the bills.
Now comes the challenge — picking the best one.
Using a business-specific card for business expenses is generally a smart idea. Rewards on business cards are often richer than on personal cards, and they allow you to keep personal and business finances separate — at least for accounting purposes.
Here’s a look at some considerations when selecting the right card for your business.
Businesses floating a balance on the card should generally search for one with the lowest annual percentage rate and best payment terms. American Express’s Plum card, for instance, lets businesses have up to 60 days to pay off the balance, as long as they pay at least 10% of the balance by the “due date.” If they pay the entire balance within 10 days, they get a 2% rebate on the payment.
“Rewards” range from 1% to 5% cash back on some or all purchases to frequent-flier miles and even more creative perks like free gasoline and retailer gift certificates.
Of course, don’t overlook annual fees. Some cards cap rewards. It’s important to read the fine print.
Some cards also make it easy for companies to automatically transfer their credit-card usage data into accounting software such as Intuit’s QuickBooks. That can save time, if not money.
Gerri Detweiler, founder of BusinessCreditSuccess.com, says business owners should use credit cards that report to business credit agencies, such as Dun & Bradstreet or Experian’s business bureau, instead of the personal-credit bureaus. Reason being, you don’t want the business’s financial woes or big expenses to ding your personal credit rating.
