Tips for Start-ups and Entrepreneurs that are Considering using Credit Cards

If you are looking to launch a start-up or are a budding entrepreneur planning to finance your business using credit, there are options out there for you. A small business credit card can offer you flexibility and a buffer to get your business off the ground and it doesn’t have to come with high interest rates. A good business credit card can be a great tool to handle your operating expenses and short term relief should a rainy day come early.

However, going through the countless offers can be daunting. If you are self-aware of your needs as an entrepreneur, you should have no problem making the right decision for your business as a good small business credit card could be the difference between early struggles and fruitful beginnings.

business credit card
Image by Images_of_Money / Flickr

What Do You Need?

Business credit cards come in all shapes and sizes these days. No two cards are likely the same. Lines of credit, rates, and the terms of conditions of each card could vary greatly even within the same company. Giving yourself a good assessment before you start your search for your card will immediately cut your search time by more than half.

Whether your business will need a high credit limit or if you will carry a balance large or small. Will you be able to pay off your balance monthly? Will you be able to benefit from rewards or travel miles? All of these questions are key to your decision and should be sorted out well ahead of time of your search, but will make that search painless.

Knowing your business plan before you act will also likely determine how your fee and rate structure will look. Being accurate will get you the best rates for your business.

Where Do You Stand?

Beyond simply knowing what you need and what you want, it is important to know where you stand. Pre-planning will yield the best results for every action you make in your business, and that doesn’t stop with choosing a credit card.

Months before you look to launch your business you should pull your own credit report and evaluate it with a fine-tooth comb. Any errors that could detract from your score need to be cleaned up immediately. Also, make sure you do not open unneeded personal credit cards or close long standing cards before diving into the business end of the pool. Both of these could adversely affect your credit history.

The better your personal credit history is, the more likely credit card companies will believe in your potential business credit worthiness.

Go Big or Go Home?

It is likely you’re most familiar with the offerings of the major credit card companies. Visa, Mastercard, American Express, and Discover have probably sent you dozens of offers for their small business credit cards. However, they may not be best for you. While these cards are time honored and traditional, the smaller local or regional bank may be able to offer you something the big card companies cannot.

A good place to start is the bank that you run your business account through. Because of the relationship already established the local bank might be able to offer you a credit card that is more tailored to your needs and provide a convenience the big companies cannot. You could end up with a more favorable rate.

If a card from a major credit card company is for you, do your research. There is no better way of doing that than going straight to each company’s small business division and start digging and asking questions as it pertains to your business. Knowing is half the battle and having your pre-established needs and wants make it easier for the issuing company to direct you to the perfect card.

Once you’ve narrowed your search, personal research into other customer’s experiences with the company and card are going to be vital. There are instances of certain companies suspending accounts, effectively shutting businesses down for months or even completely. Be diligent and don’t take the information at face value from a company that is trying to solicit your business.

Essentially, choosing a credit card for your start-up small business could be as easy or could be trying. However, like every other aspect of your business plan, proper planning and research is the sole key of actionable advice needed in finding the perfect card for your business.

If you’re starting your own business, it’s likely you are already familiar with the standard answers of finding the card with the lowest interest rates and finding the card with the most flexibility and other stock answers when posing this question. So, we’re here to tell you, look beyond the numbers and find out what you truly need and what is truly being offered to you.