Why a Business Credit Card?

Long-term planning and effective strategy are essential for any business to succeed. When it comes to the unpredictable day-to-day operations, however, flexibility and adaptability are as essential to a successful business as any planning or strategy. With a business credit card, companies have just that: a tool to cover the unexpected, the unforeseen and the incidental costs that all businesses are faced with.

Whether you are looking to improve the credit of your company, earn rewards and enjoy membership benefits or simply have the card available for unexpected costs or emergencies, business credit cards have a variety of advantages over cash and check transactions. These advantages include:

• Flexibility: Long-term goals always overlook the unpredictable events, emergencies and opportunities that occur every day. With a business credit card, businesses can capitalize on opportunities or avoid minor crises without lowering their eyes from the prize. And, though many business credit cards require the balance to be paid in full, most offer extended payment options or allow for a revolving balance, further increasing a business' overall flexibility and viability.
• Rewards: Unlike purchasing with cash and checks, business credit cards often accrue rewards points that can be redeemed for a variety of retail goods, services, gift cards and even cash. Among the most popular of these programs are airfare miles rewards, office supply rewards, hotel and leisure accommodations, among others. By consistently making payments and making purchases that accrue rewards points, businesses can quickly accrue and redeem rewards, many of which, like travel, have the potential for large savings in the long run.
• Membership Benefits: Flexibility and purchasing power aside, many of the greatest benefits of using a business credit card come in the form of the benefits that are included with membership. From travel benefits and insurance protections to emergency services and access to exclusive amenities, events and Airport Clubs, business credit cards have a great deal to offer--beyond a line of credit.
• Employee Cards: Employee expenditure reimbursements can be a time consuming nuisance for both employers and employees. With business credit cards, business owners can issue employees credit cards, set spending limits and monitor expenditures--all without ever having to fill out or sign another reimbursement form again. Best of all, employees, too, can enjoy many of the membership benefits that come with the card itself, giving them a battery of perks, tools and benefits to see them from A to B and back again.

What to Look for in a Business Credit Card

Not all business credit cards are created equal. Moreover, virtually all business credit cards will be more a result of the business owner's credit rating and history than any other factor. That said, there are several considerations that should be made before applying for or enrolling in a business credit card.

Rates and Fees
Is the rate fixed? Varying? Is there a promotional rate? When does that rate expire? What is the annual fee? Are there annual fees for employee cards? What is the late fee? The over-limit fee? All of these questions should be asked before enrolling in a credit card. Many business credit card offers come with an attractive introduction rate, which, if a revolving balance exists could rapidly begin accruing interest after its expiration. As a general rule, businesses ought to strive for total solvency, only ever putting on the card what it can pay off at the end of the statement. There are exceptions that might require business credit cardholders to extend payments or maintain a revolving balance, but businesses and, in particular, business owners whose credit ratings are at stake, should always pay the balance in full.

Business Features
Simply inscribing "business" onto a credit card hardly makes it a true business credit card. By including businesses related services, rewards programs, benefits and tools, on the other hand, does. Many business credit cards offer accounting tools like expense management reports and Quickbooks integration. Others offer businesses enrollment in office supply and business-related savings programs or rewards programs. And a few others even offer administrative, marketing and office-related referrals to card members. To be true to its name, a business credit card should, in fact, offer one--or all--of these benefits and services.

Membership Features
Business credit cards should offer more than spending power. In fact, a business credit card should offer a variety of benefits to its card members. Auto rental loss and damage insurance protection is fairly standard. So is purchase protection against loss, fire, theft, damage or price depreciation. Others even offer advanced benefits like event ticket loss replacement, accidental travel death or dismemberment insurance, access to exclusive events, hotel amenities and upgrades in air travel. Though many of these membership benefits can translate to higher annual fees, business ought to offer its members at least a few benefits in addition to a line of credit.

Rewards Programs
Aside from its convenience and flexibility, business credit cards should offer advantages to using cash and check. That's where rewards programs come in. Business credit cards should offer its members rewards programs that, through payment consistency and purchasing rewards points-accruable goods and services, allow its members to redeem points for cash back, travel, retailer gift cards, etc.

Security Features
With the increasing threat of identity theft and moreover, the fraud and misuse risks that come with issuing credit cards to employees, business credit cards should offer built-in features to prevent or dispute fraudulent charges, as well as a swift-but-accurate approval process, monitoring tools and products and, even better, fraud and employee misuse insurance.

Account Access/Customer Service
With so many financial transactions taking place away from banks and financial institutions and on the Internet, as well as new technology being developed that gives mobile phones and PDA devices extensive web and multimedia functionality, business credit cards should offer its members full online management functionality, as well as the ability to receive account activity notifications online or on one's mobile phone or PDA device.

If, however, a customer service representative is needed, the credit card issuer should offer a quick, "phone-tree"-free line for account inquiries, charge disputes and other account needs.

Using the Business Credit Card review matrix, you can see how different cards compare to one another. However, checks and dashes only tell half the story. For a closer look at these business credit cards, read the in-depth review.

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