The importance of a business credit card has grown enormously for small business as not only is it a source of raising capital but can also enhance business credit and attain valuable rewards for the company.
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Businesses need to keep revisiting the need for getting a new business credit card. Here are a few signs that can guide a business owner on whether he or she needs a new business credit card or not.
- If higher interest rates are being charged – Business owners mostly rely on their credit cards to accomplish a number of business related financial transactions such as the purchase of inventory, equipment or seasonal hires. But close attention should be paid to ensure that such purchases are not slammed with higher interest rates. If a business owner feels that he or she is paying just too much on the credit card balance then it’s time to get a new business credit card.
- When rewards become unrewarding – A business credit card should ideally offer attractive rewards points on purchases as a business purchase is far higher than an average consumer purchase. However, if an existing business credit card does not provide sufficient rewards or has no such benefit attached, then it’s time to change. Interestingly, a rewarding business credit card should also add up rewards earned on employee-issued credit cards. Usually, credit card rewards offer cash back ranging between 1% to 2% on every purchase.
- If a line of credit falls short frequently – In case a business owner is bumping into the credit limit more often then it’s a sign that a new business credit card with a higher line of credit is required. Any spending over and above the credit limit could hurt the business credit score as it translates into a high debt-to-credit ratio.