If you have been a business owner for a while and are using the same business credit card from when you first started, you may want to look for a new credit card. The terms and rules regarding credit cards change over the years and you may be able to get more benefits from switching.
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Your business credit history also builds up over the years. The terms you had when you first applied for a card may not be as good as what you could get now.
Should you get a new business credit card if your business is expanding?
If you started off as a sole proprietor and have grown your business into a bigger one, especially if you now have employees, it would be a good idea to look for a new card. You may have gotten a basic small business credit card when you first started you business but now need something that offers more function.
Many of the business credit cards now offer the ability to track expenses, not only of what you spend, but of your employees as well. They also may categorize your expenses to help you budget and to help come tax time. If you have employees, some credit cards make it possible to set certain spending limits or cut off access to the card if necessary.
Is a better rate a good reason to look for a new business credit card?
One of the best reasons to look for a new business credit card is to find one that has a better interest rate. If you have a credit card that currently has a variable APR, your interest rate changes with the economy and other factors. This makes it difficult to budget your finances.
Look for a credit card that offers a low fixed APR. Make sure it is not just an introductory offer, as this is only available for a limited time and then the interest rates increase again. The fixed rate should be set for the whole time you have your credit card.
To help you compare credit cards and find terms that work for your business, JD Power and Associates can help you out.
What are other factors in looking for a new business credit card?
If you have built up a bigger balance on your current credit card, you may want to look for a business credit card that allows balance transfers. This is especially beneficial if the card you are transferring to has a lower interest rate than your current one. Some credit cards will also offer an introductory interest rate on transfers or waive the balance transfer fee.
Rewards are another reason you may want to switch to a new credit card. Credit cards that offer rewards points are beneficial to you in that you can earn merchandise and travel rewards. If your current card does not offer rewards points you should look for one that does.
If your current credit card does offer points, look at the terms. When rewards credit cards first came out, many of them had expiration dates for when you had to use your points by. Others had certain restrictions and blackout dates for travel.
Many business credit cards that are offered now do not have expiration dates or blackout times. Look for one of these so that you can get the most out of your credit card and bonus points.
Along with bonus points, some rewards credit cards offer cash back. If the business card that you have now does not offer cash back, you may want to look for one that does. In addition, many of the cash back rewards cards offer 1% back.
To compete with all the other credit cards available, some cards are now offering higher percentages of cash back. When looking for a new credit card, look for one that offers a high percentage of cash back.
When is looking for a new business credit card not a good idea?
It is not a good idea to look for a new credit card if it is because your current card has reached its credit limit because you have not been able to keep up with the payments. Getting a credit card at this point will only put you further into debt.
A better idea at this point would be to work on cutting costs and increasing the revenue of your business so you can begin to pay off your credit card. For tips on budgeting and paying off credit card debt, go to My Money.gov.
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