Six steps to take before you pick a business credit card

It is critical for business owners to maintain an accurate record of your business purchases and expenses. Besides helping you run a more efficient business, it saves your bookkeeper from wasting time separating your personal expenses from business expenses.

One of the ways you can separate and record your purchases is by using a business credit card. With a company credit card you can receive the type of detailed reporting that makes it easy for you to budget, plan, and spot tax deductions. 

With hundreds of business credit cards to choose from, however, it can be quite a challenge for you to decide which card is best. Many of these cards serve a unique purpose that is fine for one business but completely inappropriate for another.

So before you apply for a business credit card, follow this six-step plan to choose the right card for your small business:

Conduct a credit assessment

Be fully aware of where your credit stands on a personal and company level. Start by obtaining copies of your personal and business credit reports with your credit scores. You are entitled to a free credit report from Dun & Bradstreet's Personal Credit Report  website to help you achieve and maintain good credit health.

Determine which type of business credit card you need

You should understand the primary functions of the card you are applying for, including its limitations. Whether it is a business debit card, prepaid business credit card, corporate credit card or merchant card, make sure you select the one that best fits the needs of your business.

Read the fine print

Just because a card issuer offers all kinds of special perks and rewards doesn't mean it is necessarily the best card. Always read the fine print so you completely understand the terms and conditions and fees associated with the card.

Look out for teaser rates and special offers

While offers like a no-interest or no annual fee promotions seem like a good deal, most of these offers come with strings attached. Make sure you understand what conditions must be met and how long your teaser rate stays in effect.

Apply for a business credit card that builds your company's credit

To protect your personal credit you should apply for cards that report your payment experience to your company's credit files. 

Do not apply for too many cards

Be selective on which cards to apply for because excessive inquiries can raise a red flag with creditors as well as negatively impact your ratings.

Don't make the mistake of putting your personal credit and assets at risk when it comes to running your business. Obtain a business credit card so you can start establishing a creditworthy company.

By Mario Carbajo of AllBusiness

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