How many credit card you can use safely ? - Mods Planet

Having the right business credit card can make you a powerful force when it comes to business finances. On the flip side, choosing the wrong card could contribute to your business’s demise. That’s why it’s so important to make sure you apply for the right business credit card. For best results, you need to know the right card based on its limits and rewards and dependent on the business that will use it. Here’s a better explanation… What Type of Business Credit Card Do You Need? To best decide on a credit card for your business, it’s essential to think about what you need it for and how it will get used. The answer to those two questions will severely impact which particular card is best for you. Some things to think about include … How often will you use the card? If it’s your main line of cash, look for terms that allow for excessive card use. Make sure you do not get hit with any minuscule charges. You do not want to spend a fortune on balance transfers, ATMs, etc. Where will you use the card? What type of stores do you plan to shop at? If your card is just for food and gas, plenty of store-based credit cards reward gas purchases. The same goes for many different items; you can also look for greater kickbacks through a store-based rewards credit card if you frequent a particular store. Will you pay the card off every month? Whether you plan to pay the card off in full will also play a role in your decision. If you plan to carry the debt, you must focus even more on the card’s interest rate. If it’s for periodic purchases, you might want to consider a 0% APR credit card that gives you enough time to pay off your outstanding debt. Will you stumble upon hidden expenses? You need to understand all the possible fees a credit card has before deciding it’s right for your business. It’s easy for excessive charges to get hidden through sneaky terms. By dissecting all the little details, you can determine which credit card will be the most cost-effective for your business. That said, you do need to know which fees you will most likely need to watch out for along the way—some areas where credit card companies charge fees. How to Choose The Right Business Card? Having too many credit cards harm your credit score and financial situation. According to our study, the average number of credit cards rose from 2.5 to 4. That’s why it will be better to consider the right card for you. Here are the main factors. APR The APR (or annual percentage rate) of your card will dictate how much you spend on a year for the balance you carry. If you borrow and pay off the same amount each month before your cutoff date, it’s possible to pay $0 in a year while using a credit card with a 29% interest rate. In most cases, you have 20 or 30 days to pay off your balance before interest applies on non-0% APR cards. According to our study, the APR varies between 15.10% and 16.97%. Try and estimate your monthly carried balance to get a good idea of how much your total interest payments will vary by card. You might want to pay a premium for a 0-% card to avoid those interest charges, although it could also make sense to do the opposite. This all comes down to your situation and how often you will use the card versus pay it off. Balance transfer Never settle for a lower card rate at the cost of a higher balance transfer fee. These cards are worth their gold weight, but only when the balance transfers come at no cost. Yet, balance transfer charges can run upwards of 3% to 5% of the purchase total. So, no matter how many bells and whistles the card has, stay clear from any cards that charge for balance transfers. Cash advance Your business will not always have immediate cash to use. Having fast access to your business credit limit can come in handy. Yet, most business credit cards will charge either a fixed amount or a percentage of the total when you perform a cash advance. Be careful when deciding which card to apply for, as you do not want to dish out 2% to 4% just for the advance. Closure or inactivity fee You might want to avoid signing up for a credit card with a fee for canceling the card. Even more so, it’s a good idea to stay clear of any cards that charge an inactivity fee. This is important for any business owner who needs a business credit card but does not plan to use it daily. If you do not use the card enough or spend enough dollars worth, it could shut off on its own (at your expense), so be careful of that. Foreign conversion and transaction fees When you use your credit card in another country, a ‘foreign transaction’ takes place to convert the two currencies. The credit card company then charges you a foreign conversion fee of around 2% to 3% of your purchase total. If you are looking for a business card to use while traveling, make sure to find one that includes no foreign conversion or transaction fee. Late fees The first time you are late for a payment, you can expect to pay around $20 for your delinquency. This amount will go up to $35 for a second offense. The card company can also raise your APR after making a late payment, but they must now wait for 60-days and give you written notification ahead of time. Bankrate also recommends you check for these extra fees. The Best Type of Credit Card by Business Take a look at the most popular types of business credit cards: Business rewards credit card A rewards card will give you cash, points, or other valuable kickbacks as you use the card. The amount you will receive back is dependent on the card company. This is often in the range of 1-2%, but it can vary a lot. When choosing between the best rewards cards, you have to be careful about two things. First, you need to make sure the rewards cap is not set so low that the card fees’ rewards value is demolished. Second, you have to ensure you are not getting a premium reward for shopping at a specific store. According to a Finder study, nearly 80% make their final choice based on the type and quality of rewards on a card. Finder has also found that cardholders in the super-prime category made far more of their purchases on rewards cards than other credit ratings. If you are getting a business rewards card for a home renovation company, you might benefit from limiting yourself to a store-based card. These will still be useful outside of that business, and some still pay rewards when shopping elsewhere. The reason for limiting yourself would be to capitalize on store-based rewards, which are often given to local small businesses. Business travel credit card If you find yourself traveling on the road a lot, you might want to look for a travel-friendly credit card to use. This is important because of the extensive fees that can come about when using your credit card all across the world. Frequent travelers should look for the highest travel rewards they can get. This will create further savings (or profits) down the road. Some cards offer promotions on flights, hotel bookings, and more when you use their card. When comparing different travel rewards cards, make sure to look at the point multipliers; depending on how (and where) you spend your money, it’s possible to have your reward points increased a lot this way. If you only travel once and a while, stick with a regular business credit card. You can always take money out to exchange off the card instead. Of course, make sure to save all your receipt from the trip, so your accounting stays in order. Start-up business credit card Things are a little different when you are just starting. A lot of your costs will come about in the first few months. If you have enough business capital, go for a rewards card and enjoy the kickback from your extensive spending. Otherwise, focus on keeping your borrowing costs to a minimum until your cash flow picks up. If you are starting and plan to use your credit card for your start-up costs, it would be good to look for a 0% APR card. Most of these are set up with a 0% interest period for the first year. This is a considerable amount of time to get things in order as a new business, and avoiding the interest in the process is a huge plus. Further, any business with strapped pockets might want to look for a start-up business credit card that offers product warranties. There are a few out there that will offer coverage against your purchase under certain circumstances. This can come in handy if it ever saves you from having to buy the same product all over again. Mobile business credit card If you run a business that’s always on the go, such as a catering or taxi service, you need to focus on those mobile expenses. The most obvious option would be a gas rewards card, which will give you a discount while also kicking back a reward. These cards are a dime a dozen so that you can get picky regarding specific fees and terms. Self-employed business credit card A business credit card can really be of help to the self-employed. If you are self-employed and spend a lot on business expenses, a rewards business credit card is perfect. This is especially true if you have gas and meals to charge to a card as business expenses. If you want a good self-employed business credit card, you might need to find a co-signer with excellent credit. Getting a credit card while self-employed is not easy. You will find yourself running up a bill while waiting with little notice of when work payments will arrive. This is why many go the route of getting a cosigner to help; few qualify for a business credit card in the first place. If you are going for a self-employed business credit card, please make sure to avoid any high-rate, high fee cards that are pushed for easy attainability. How to Compare Credit Cards Online You can search in Google for cardholder reviews by card only by entering the word ‘review’ at the end of the card name. This will reveal many different reviews, although it’s possible for some to come from unreliable sources. If you find a forum discussion about the card, check those pages for further insight from real cardholders. It’s easy to compare credit card options online, as you can find everything you need to know with just a few mouse clicks. Plus, with Google’s search functions (example: inurl: review ‘credit card name’) to make it easy to find specific details, you should have no problem identifying the best card for your business. Use that to your advantage and research deeper about each card before you pass on it or apply for it.

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