How to Choose a Business Credit Card?

A business loan is one of the most popular ways for businesses of every size to access necessary financing in times of needs. However, the requirements for such loans are such that many enterprises, especially new and small ones, struggle to get approved. A corporate credit card can be ideal for such businesses.

Apart from getting access to necessary funds at any time such Credit Cards also come with great benefits such as cashback, reward points, air miles and more. Also, many business owners use them for improving their credit score.

However, for many owners the plethora of options available in the market often seems confusing. If you are struggling with the same, here are a few tips to help you select small business Credit Cards:

1. Understand the differences between a personal and business credit card

A corporate card should only be used for business and not personal expenses. These cards have higher credit limits to make it easier for business owners to manage their business expenses. Many of the card providers also allow you to issue add-on cards to your employees. By understanding the differences between the two you will be better prepared to make the right decision.

These cards have higher credit limits to make it easier for business owners to manage their business expenses. Many of the card providers also allow you to issue add-on cards to your employees. By understanding the differences between the two you’ll be better prepared to make the right decision.

2. Check the business expenditure

The easiest way to know the type of credit card you should select is by going through your business expenses. Check some of the most substantial operating expenses in the past 6-8 months and use the data to choose a credit card which offers maximum rewards in those categories.

For instance, if you are spending a lot of business money on flight tickets for you and your employees, it will be wise to pick a card that offers air miles and offers on other travel-related spending.

3. Zero or minimum annual fee

Most of the business credit cards generally have a spending limit after which the annual fee of the card is waived off. Prefer such cards as this will make your card cost-free while giving you great benefits.

There are also Credit Cards with zero annual fee. While some of these cards are great, the majority of them often have higher Annual Percentage Rate (APR) which brings us to the next important tip.

4. Compare the APR

While most business owners only compare the features and benefits of the Credit Cards, it is more important to compare the APR first. The APR is the interest you are required to pay if you do not clear the entire Credit Card balance every month.

This is especially true for business owners who know that it'll be difficult for them to pay off the entire balance each month. However, don't just base your decision on the APR alone. The right Credit Card for you is the one that offers the right balance of reasonable APR and features and benefits you'll need the most.

5. Check yours as well as business' credit score

Needless to say, the bank will check yours as well as the business' credit score before approving your credit card application. Thus, it is imperative to first check the scores yourself before applying for the card.

If your credit score is not in line with the requirements of the card provider, your application will only deteriorate your credit report. This can make it difficult for you to get a credit card from other providers as well. So, before you apply for business credit card, ensure that you first check the credit score requirement of the provider.

Managing business expenses with a corporate credit card

A corporate credit card is one of the easiest ways to access funds at times of need. While the selection can look overwhelming at first, understand a few basics and remember the tips discussed above to make things easier.

If you are still unable to decide, you can also get in touch with a reputed bank to discuss your needs and they will recommend the right credit card for you.

DISCLAIMER

The contents of this document are meant merely for information purposes. The information contained herein is subject to updation, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient's own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith and sources considered reliable by lClCl Bank. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. 'lClCl ' and the 'I-man' logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.