Home Business Looking For Short-term Business Credit? – Compare The Best Business Cards Offer

Looking For Short-term Business Credit? – Compare The Best Business Cards Offer


Having an affordable and reliable source of short-term credit is often a blessing for many business owners. Most short-term loans that are easily obtainable are often associated with an extremely high borrowing cost or rate of interest. As a business owner, one must exercise financial discipline in order to succeed. Paying such high fees on short-term loans can eat away at your business’s profit margins. Such high-interest loans are debt traps that can lead a business down a road they can’t recover from.

Looking For Short-term Business Credit? – Compare The Best Business Cards Offer

The Importance Of Business Credit Cards

Business credit cards offer business owners the luxury and peace of mind of having money when they need it. Most business owners in America are guilty of using their personal credit cards for business transactions. 

What Is A Business Credit Card?

A business credit card is just like a personal credit card. The only differences are in the interest rates and credit limits offered. Business credit cards tend to have much more favorable interest rates and much higher credit limits based on your credit score.

Other differentiating factors include the fact that business credit cards rely on personal guarantee. This essentially means that if one defaults on a payment the issuer can use personal judgment and debt collection to hold you personally accountable. 

Business credit cards also tend to have much stricter requirements as compared to personal credit cards. This means that as a business owner to get the best deals you must ideally have an excellent personal credit score. 

It is safe to say that business and personal credit cards are regulated differently. This, in turn, means that business credit cards can have very different terms and conditions as compared to a personal credit card.

Understanding these terms and conditions and finding a business credit card that best suits your business needs is what savvy business owners do in order to keep their cost of borrowing down and profit margins up.

Comparing Business Credit Cards

As a small business owner saving on your cost of borrowing can often make a huge impact on your net profit. This is why it is essential that business owners compare the best business credit cards offers in order to find one that is the most beneficial and cost-effective for their business needs.

When comparing business credit cards they are a few obvious factors that all business owners take into consideration; interest rate and credit limit.

However, apart from these main factors, there are several other things that need to be considered before choosing a business card that you can depend on. Let us now take a look at some of these other important factors:

Reporting To Credit Bureaus – Building Business Credit

In America, all personal credit card transactions are reported to one of the three major consumer credit bureaus; Experian, Equifax, and TransUnion. However, depending on what business credit card you choose, the issuer of that card may or may not report your business transaction to any credit bureau unless you are late or default on a payment.

This may not seem important but can in fact make a huge impact on your credit score. For example, if you know that a particular business credit card is only going to be used occasionally and you are confident that you can make timely payments and not max out the card that often then you might want to choose an issuer such as Citi, Chase, Discover, and CapitalOne.

On the other hand, if as a business owner you know that is likely going to be your primary business credit card and as such, it is always going to be hovering around its max credit level opting for an issuer that doesn’t report transactions to credit bureaus unless you are late or miss a payment can, in fact, protect your credit score and allow you to pursue other lines of credit.

Issuers such as Bank of America, PNC, and Wells Fargo might be better options in this case.

Terms & Conditions

Reading up and understanding the terms and conditions is also extremely important for business owners. Business credit cards tend to have fewer restrictions and regulations governing interest rates and fees, changes in policy and terms, and even policies involving debt collection.

However, most issuers often exercise the same terms and conditions on business cards as they do for personal cards but there can be exceptions to this.

Debt Collection Laws 

Running any business comes with an element of risk. No business owner expects their business to fail but this does happen, more often than you think. In the case of a personal credit card a third-party debt collector is bound by the rules set by the federal Fair Debt Practice Act (FDCPA).

However, business credit cards do not fall under the FDCPA and can be a lot more aggressive when it comes to the collection of small business debts.

The Need For Short-Term Finance For Small Business Owners

Any small business owner can relate to having periodic cash flow problems while operating their business. Unforeseen business expenses, payment cycles and capital investments can all result in a cash flow deficiency that can only be fueled with short-term credit.

Business credit cards are by far the most convenient, flexible, versatile, and affordable of all short-term credit options and depending on the issuer you choose can have amazing positive impacts on your personal and business credit score.

Even for business owners that have poor credit scores applying for a business credit card can help them improve that score over time which can then lead to even better credit options.

It is important for business owners to always actively seek out short-term credit options that offer the best terms, rates, and conditions as any savings on borrowing directly impacts a business’s bottom line.