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If you are just starting a new business there are a thousand and one things you need to do. One of the more pressing orders of business is making sure the business’ finances are in order from day one. Small business accounting can get very complicated, especially if you are a sole proprietor and have so many other “hats” to wear as well.
One of the ways you can simplify your small business accounting, as well as build credit and have a little extra emergency cash on hand is by obtaining a business credit card. If yours is a new business though that can be more of a challenge than doing so is for an established concern but it is not impossible and there are some business credit cards that are especially beneficial for a new business to hold.
By paying for many of your business expenses on a credit card you will limit your own personal liability for the debts your business accrues as it will be the business, not you personally, that is responsible for the debt. If you were to use your own personal plastic that would not be the case. Accounting also becomes easier because expenses are detailed on your monthly credit card statement and can simply be plugged into whatever accounting system you have chosen.
Many new business owners will end up carrying a balance from month to month on their business credit cards in the beginning so a low APR is certainly likely to be a big bonus and more important than reward points that are benefits you can think about later on down the line when the business is more established, cash is flowing in and you can pay off your credit card balances in full every month.
Here is a little information about the best business credit cards for new businesses:
Small Business Microloan Visa Card
If you have poor credit personally and the business you have started is new getting any business credit card is going to be quite a challenge. However the Small Business Microloan Visa card is designed for this specific situation. There is a $750 maximum credit line attached to the card and there is an automatically deducted set up fee of $125 which will decrease you available limit but for a new business that needs a small injection of available resources, as well as way to begin building up a business credit rating this card may be ideal. The APR is 23%, higher than other cards might be but again as this is a business credit card that can be issued to those with a bad credit rating then it could be a lot higher.
The best way to use this credit card would be to use it often and try to pay the balance off every month if at all possible. That way your business can begin building its own credit profile and qualify for a different credit card with more favorable terms in the future.
Citi/AT&T Universal Business Rewards
For those whose business/personal credit is in a little better shape – but not perfect – this business credit card may prove to be the right choice. On the APR side of things there is a 0% APR introductory rate that remains in effect for 6 months and then the 16.99% APR that follows it is still pretty reasonable. There is no annual fee and additional cards for employees are issued free of charge and pre set spending limits can be set on each card individually and reset or changed online as needed. That can be very handy if employees run into financial trouble on the road and need help right away.
The nice thing about this business credit card though is that it is a good card for a new business but it still offers a very good rewards program. Cardholders (all of them) earn 1 “Thank You” point for every $1 spent on most purchases but with 3 points per dollar when the card is used to purchase gas, office supplies or for professional services like tax preparation or offsite printing. And if you purchase A T & T products you can earn 5 points per dollar (maybe that business iPhone is a good idea after all).
The rewards that are earned can be redeemed for statement credit, travel rewards or merchandise gift certificates and points do not expire so you can safely bank them to save up for a “big reward” if you so desire.
Capital One Business Platinum – This is another no frills business credit card that is within the reach of a new business that offers reasonable rates and excellent customer service. There is a 0% APR on the card for the first six months and afterwards the 19.99% APR is still fairly reasonable. There is a low $39 annual premiership fee but that is very good compared to some other business credit cards.
Other benefits of the Capital One Business Platinum Card include the option to obtain additional cards for employees at no additional cost, cards that you can set a spending limit on from the comfort of your desk online. There are also travel insurance benefits attached to card use as well as a 0% fraud liability protection program.
There are other great Capital One business credit cards available but this is a great starter card for a new business and once a steady credit history has been established you can apply for some of the other Capital One business credit cards that offer excellent rewards and cash back benefits.