Choosing a Business Credit Card

There are several factors to consider when choosing a business credit card. Many of these cards offer 0% introductory APR. Others have flexible repayment terms and annual fees. Choosing the right card is crucial for a business owner because it can make a big difference to the company’s bottom line. Below we’ll discuss a few of the factors to consider. You may find the information helpful. Weigh the advantages and disadvantages of each before choosing a business credit card.

0% introductory APR on business credit cards

A 0% introductory APR on business credit card purchases can help you pay off the balance faster than you would if you were paying full interest. This introductory offer lasts for seven billing cycles, and you can avoid finance charges during this time. Paying off the balance before the introductory period ends or paying the balance in full by the due date can help you avoid incurring finance charges. In addition, these cards don’t charge an annual fee.

Flexible repayment terms

Businesses need to have access to working capital on a regular basis, and that’s why flexible repayment terms on business credit cards are so beneficial. In some cases, the card offers 0% interest for the first five years, and this means that you can access up to $15,000 in cash within a few months. However, before you can take advantage of this benefit, you must make at least the minimum monthly payment on time. If you miss a payment, interest will start accruing, and you may have to repay the entire balance over a longer period of time.

Interest charge if balance is not repaid in full

Most credit card issuers use a formula that calculates interest charges based on an average daily balance, and if the balance is not paid in full, additional interest charges are added to the account each month. This means that paying off the balance in full is essential to avoiding incurring unnecessary interest charges. You can find details about this calculation method in the cardholder agreement or on your monthly statement.

Annual fees

If you’re planning to use a business credit card, you should know that they come with a host of annual fees. These fees cover a range of costs, including interest, late payment penalties, and annual fees. Understanding how these fees affect your business will help you decide which card is best for you and your business. The annual fees for business cards are higher than for consumer cards. Here’s how to compare the annual fees of different cards:

Small-business credit cards aren’t covered by business credit cards

Oftentimes, you won’t be covered by business credit cards if you have a small-business credit card. This type of card requires good or excellent credit. You must have a credit score of at least 700. Some credit card companies offer a card for small-business owners with poor or fair credit, but this type of card isn’t a good choice for those who want to establish a good business credit history.

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