Take a Look at Secured and Unsecured Business Credit Card
February 24th, 2010 | Author: weissheiss
Having good credit history is certainly an advantage when applying for new credit. The same thing is true for business owners who want to obtain a business credit card. There are actually two types – Secured and Unsecured Business Credit Card. In this post, we will discuss what each of these cards have to offer and how you can choose the right one for you.
The Non-secured Small Business Credit Card
Any small business with good personal credit can easily get approved for it. Even if you have just started up your company and have yet to build business credit, getting approved should not be a problem. In fact, using it is a great way to build your corporate credit as long as you pay your balances on time.
The Secured Small Business Credit Card
Secured card issuers do not grant approval based upon the applicant’s credit rating. Nevertheless, this type of account does require the submission of cash deposit. The value of your security deposit will also determine the value of your credit line. Through this arrangement, the bank or issuer gets some assurance that funds are readily available in case you fail to keep up with your payments.
The great thing about it is that they can be used to rebuild your bad credit. How? Through regular use of it and timely payments, an entrepreneur can surely rebuild his/her personal credit rating while building good business credit at the same time. It will usually take just a few months to a year to improve bad credit, depending on how bad the damage is.
Things to Remember About Credit Cards
Which is card is for you? Obviously, if you have no problem with your business or personal credit history, you should look for a card that offers the best deal. On the other hand, if you have imperfect business or personal credit, acquiring a secured one will give you the break you need. Regardless of what type of card you use, you must follow these simple tips for cardholders:
Choose cards that report to credit trackers. Indeed, not all cards are available in the market that provides credit report to the credit bureaus. You must make sure that this provision is included before signing up for a card.
Choose a card that matches your business. Consider carefully your financing needs as a business and look for a card that can provide you with the assistance and services you need. If you want a reward business credit card, see to it that the program is easy to follow.
Pay attention to payment schedules. Never underestimate the importance of paying on time. There are many advantages to being a prompt payer such as not getting penalized with fees, reducing the risk of debt build-up, and maintaining good credit.
Use your business credit card for business only. Fight the temptation to use your business credit line for your personal whims as this can easily lead to problems. Always keep your personal and business finances separate from each other.
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