Starting a business often results in a lack of good cash flow, but obtaining the right credit card can make a positive difference. Operating on credit has become a way to ease ordering for a business in the online world. It can stretch each dollar coming in until a positive cash flow is established. There are many credit cards available, and it pays to shop around before selecting one. Finding the right credit card all depends upon what the business needs.
Checking Interest Rates
When cash flow for a new business is an issue, it is generally wise to consider how much borrowing money will cost over time. The vast majority of credit cards will have a few weeks grace period with no interest. After those days are gone, the interest can add up quickly.
Comparison shopping may take time, yet the ability to estimate the cost of credit can be invaluable down the road. Being able to estimate how much that new machine or raw materials will cost when paid over several months could make it wise to find cost cuts or raise prices. This is just one of the main reasons to compare credit cards before making a commitment.
Annual Fees and Rewards
There are cards offering no annual fees, yet that may be a drawback for some business owners. Annual fees and rewards are often balanced by card companies to serve the needs of clients. Business clients traveling a great deal might be more willing to pay an annual fee for a card that offers rewards in line with their business travel. It can save money over the long run, so that should be a consideration before filling out an application.
Low or No Credit Score
Many companies starting out may not have had enough time to establish a good credit history in the name of the business. The experts at Lantern by SoFi suggest business owners “compare credit cards of all types.” Getting even a secured credit card can help a business begin to build a credit history. Using the card as a way to build credit can be done relatively quickly when it is handled responsibly. Paying on time will establish the business as a good credit customer. This can be one of the best ways to overcome a low or no credit score for a new company.
Look Past the Hype
Many companies today offer personalized pictures on the card face, or they may offer discounts not suitable for business purchases. Look past the hype to break down what the company can offer for a business only. That could be the deciding factor in finding a card with lower APR credit rates, low or no annual fees, and a possible longer grace period before interest is added to the total.
There are many important decisions when starting a business, and choosing the best way to establish credit is often one of them. Taking the time to compare cards for what they will cost is just the start. Looking for rewards that could save money can be a bonus over time. Finding a card that offers good service instead of hype can help make a business successful in the credit arena and the market.