Business Charge Card Benefits to Consider

Business charge cards are a form of flexible business financing. Many borrowers do not treat their charge cards like loans, but they are in fact loans made to your business each month or each year. As such, you may use these cards to replace other financing needs and capitalize on a number of benefits only available through business charge cards.

Flexible Financing Schedules

The main advantage to using charge cards over short-term loans for your business is the increased flexibility. With a charge card, you decide how much money you need on a weekly or monthly basis. You can also decide how much you can afford to pay back month-by-month instead of agreeing to these terms up front. This flexibility comes at a cost; the interest rates on charge cards tend to be higher than those on installment debts. If you pay down your balances regularly, though, the higher interest rates will have only a minimum impact on the cost of financing over the life of the loan. 

Credit Building Opportunities

Charge cards are a fantastic option to build business credit. When you first start a business, you may have to use your personal credit and assets to secure a loan. This poses a high risk to you personally if the business fails. It is essential to have the business start building its own credit as soon as possible to mitigate this risk. One of the fastest ways to build business credit is to make daily purchases on a charge card. When the purchases are paid off each month, the business's credit will slowly build. For businesses that are able to spend and pay off tens of thousands of dollars in charges each month, a high credit rating is possible in as little as one year of business. 

Points and Rewards

Most business credit cards offer points and rewards for spending money on the card. Since businesses have a higher budget than households, it is common for businesses to gather points very quickly. These can be used to purchase items for the business, and you will be surprised to find that a number of high quality retailers have deals with the charge card company to offer business equipment as part of a rewards program. In fact, some retailers even discount purchases made with a business credit card. For example, you may be able to secure a card connected to a shipping company to reduce costs to ship your product. 

Business Specific Charge Cards

Instead of simply taking out any charge card, look for cards that offer services for businesses in your industry or of your size. Small business charge cards address the needs of small businesses, such as the expense to travel to meetings. Larger businesses may be offered discounts for buying in bulk. Ultimately, there is a wide array of cards to choose from, and you can likely locate one that meets your business costs in the long run while providing you with discounts and rewards in the short-term. 


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