Pros and Cons of Small Business Credit Cards

When used as intended, small business credit cards can be very beneficial for growing companies. However, you should also be aware that there are potential hazards around the corner, waiting for you to commit just a single mistake. Determine whether such a card is right for you by examining the pros and cons of these financial tools for business. 

Pros

There are a number of reasons why a credit card designed for small businesses is a must-have. Some are the following: 

1.       High Approval Rate – Consumer cards have stricter rules. Most of them require you to have at least good credit rating with sufficient income and established payment history. With a small business card, you do not have to have an excellent score just to qualify for a revolving credit line. The process is fast and simple, letting you borrow money easier than other traditional lines of credit. 

2.       Build Credit – If you don’t have good credit rating, now is the time to focus on building it using the plastic. You can watch your score go up as you continuously pay your bills on time. 

3.       Gain Rewards and Enjoy Exclusive Perks – Most cards today come with special rewards, including free airline travel, discounts, and free meals when you purchase supplies and equipment for your office. 

4.       Ease of Bookkeeping – Most small business cards offer a year-end summary to help owners keep track of their expenses, ultimately simplifying bookkeeping processes. 

5.       Convenience – Credit cards are known for being a very convenient tool. Your card can give you access to funds especially in times of emergency.

Cons 

Many people are wary of these types of cards and most of them have valid reasons. Here are the top three reasons why: 

1.       Interest Rates – These rates fluctuate time and again. Plus, many cardholders end up in debt because of the high interest rates. Once you delay your monthly payment, expect to see the interest grow rapidly. 

2.       Personal Legal Obligation – Most cards have personal liability arrangement where you secure the card in your name. By signing the agreement, you accept that any late or non-repayment would reflect in your credit report. 

3.       More Expensive – Although you have fast access to cash anytime you may need it, this accessibility comes with a price. Cash withdrawal through ATMs has high fees, and you have to watch out for the interest rate, late fees, and other penalty fees as well. These make the card more expensive than just using cash. In addition, most business cards require you to pay the annual fee, too.

Before you rush to apply for a small business credit card, remember to think things through carefully. Consider whether the advantages offset the downsides associated with the plastic.

0% Interest Credit Cards From Chase

The 0% interest credit cards from Chase are perfect for those who have debt and those who simply wish to save more cash while shopping. These cards make it possible to pay for monthly balances easily. Chase has a good number of these cards, the prominent ones of which are the following:

Chase Freedom® MasterCard and Chase Freedom® Visa

Both cards have similar features except for the payment network. Nevertheless, they both come with essential attributes that could make any card holder’s life more convenient. The 0% interest rate can be availed by card holders upon sign up. The typical duration of the promo rate is 15 months, but this will depend on your credit score. The offer is applicable to balance transfers and purchases. The two Freedom® variations do not have an annual fee but require you to have excellent credit to qualify.

Slate® from Chase and Slate® MasterCard from Chase

Again, the two are pretty much the same. They are considered as among the best cards for balance transfer these days. The introductory offer of 0% interest also runs up to 15 months, both on balance transfers and purchases.  There is no annual fee as well and they require excellent credit. Both have patented identity theft and fraud defense and adding another card user is allowed without extra charge. These cards come with the popular Blueprint® feature from Chase.

Disney's Premier Visa® Card

This card does not allow balance transfers, but this is a great choice if you want a card that offers 0% interest for up to six months. A cash back card, Disney's Premier Visa® from Chase lets you earn $100 worth of statement credit right after your first purchase. This is best for people who often shop at Disney Store locations and at DisneyStore.com.  Other perks are included as well, such as the Character Meet ‘N’ Greet at Disney Theme Parks.

Ink Cash(SM) Business Card

This is the card for business rewards aficionados. Ink Cash(SM) Business credit card comes with tons of rewards right from the moment you sign up. The cash back bonus after making your first purchase, plus the additional bonus after spending enough credits are hard to match. All purchase you make, especially those that are related to your business, are eligible for a high cash back percentage. Even your meals will be granted with discounts and rebates. For six months, this card allows you to be interest-free while offering no annual fee throughout the period of card membership.

The 0% interest credit cards from Chase can certainly help you save the most money. In addition, you get to pay your balances comfortably without worrying about your impending dues.

How to Get a Credit Card If You Have No Credit History

Building credit with a credit card is one of life’s paradoxes – you need credit to get a credit card. If you have no history yet, creditors will often treat you as if you have bad credit, though they are not the same. The reasoning behind this logic is that you have not been able to show how disciplined you are as a payer and cardholder.

Obtaining Credit Score

In order for you to qualify for a card, you need credit history. Your credit score is a rating for your credit behavior and your behavior is displayed in your credit report. Your credit report contains your credit history information, how you paid your balances, and whether or not you have existing debt. Creditors take a look at your credit report as well as your credit score. Unsecured cards have credit score requirements.

If you don’t have credit history, you can’t have a credit score. To obtain it, you need to have a credit card or any type of credit line that has been active for at least six months.

Why Get a Credit Card

If your main goal is to establish history, remember that a credit card is not the only way to build it. However, if you don’t have such plastic yet, you are missing out on a lot of things. First is that there are credit card perks that you can acquire for free. These include extended warranties on your purchases, travel insurance, automatic eligibility for roadside assistance, and anti-fraud protection.

Second, although a credit card is not your only choice for building credit, it is actually your best choice. It has the ability to establish, maintain, and raise scores faster than any other type of credit line. If used responsibly, your card can be your gateway to obtaining a low-priced dream house, for example. This is because there is a huge difference between the amount you will have to pay if you have excellent credit and when you have poor or limited credit.

How to Get a Card

Obtaining a credit card without credit history is difficult, but it is not impossible. Here are some ways to get your first card: 

• Get a store card – Many stores are willing to dole out cards to buyers, even if they have no history. Apply for one that reports to credit bureaus. Start using the card, but make sure you don’t purchase more than how much you would with real cash. Moreover, don’t forget to pay off your bills in full each month.
• Open a secured card account – Make a deposit, usually from $200 to $3,000 and link the secured card to your savings account. Start making purchases against it and make timely payments. Most secured cards report to credit bureaus, but it still pays to make sure your card does so. When used wisely, you may be allowed to switch to an unsecured card after at least six months.

 The two types of cards mentioned above don’t require credit check. Use them correctly to build your credit history and to be able to get the card you truly want in the future.

Credit Cards for People with Poor Credit

If you have poor credit rating, don’t think that you will not be able to get a new credit card. Although

you have fewer options than those with excellent scores, it does not mean that you will not be approved once you submit an application. There are cards that are particularly targeted to consumers with bad credit rating. The choices are not vast, but you are still likely to be able to find just the perfect card for yourself.

At the moment, there are a good number of credit cards for people with poor credit, including the following:

Capital One® Secured MasterCard®

This card has an annual fee. Its annual fee, though, is not as high as those cards preying on people with bad credit. This is a good choice as it can help you get back on track, especially when used properly. Capital One® Secured MasterCard® is accepted in many parts of the world – thanks to its MasterCard network.

Since this is a secured card, you will be required to deposit an amount before you can use it for whatever purpose it may serve you. However, your credit limit will be higher than what you deposited. Another great thing about this card is that once you have established better rating, you can then apply and get approved for an unsecured card from Capital One®.

Orchard Bank Credit Cards

Orchard Bank is a known division of HSBC for many years. Quite recently, Capital One® has purchased all

the cards from Orchard Bank and all those issued by HSBC as well. Nevertheless, as a trusted leader in providing cards for people with bad credit, applying for a plastic from Orchard Bank (or Capital One®) is

definitely a good idea. If you send your application to Orchard Bank online, you will be considered for four cards: one is a secured card while the other three are unsecured. If you don’t qualify for the unsecured cards, you will automatically get the secured card. Hence, you will never go home empty-handed as your application will always get approved.

DCU Visa® Platinum Secured Card

Most people say that you can never go wrong with a card from a credit union. Perhaps they are right

with the DCU Visa® Platinum Secured Card. Issued by the nonprofit organization, Digital Federal Credit Union, you can obtain this card by simply making a small donation.  DCU Visa® Platinum Secured Card is a gem as it does not require you to pay for the annual fee, which is quite common in all other secured cards. The APR for purchases is fairly reasonable as well.

All the cards in this list are known as secured cards. They mostly approve applicants, except for the DCU Visa® Platinum Secured Card, which requires you to be a member of the credit union first. Nevertheless, joining is easier than with other nonprofit organizations.

Once you have your credit card, you should make it a point to always pay on time and to never carry balances. This is the most efficient method towards rebuilding your credit history.

Best Credit Cards for Students

Years ago, students, particularly those who have reached 18 years old, could easily get a credit card. Since the implementation of the CARD Act of 2009, though, it has become a lot harder for students under 21 years of age to get their own plastics for personal use. The Act aimed to protect students from debt while they are still in college.

Nowadays, a wide number of cards are available for students who are able to meet the requirements set forth by the CARD Act.  Given the huge number of cards today, it may be challenging to narrow down the list to get the best credit cards for students.  Nevertheless, here are the most valuable cards that you can start with as you shop around for your first plastic:

JourneySM Student Rewards from Capital One®

This is one unbeatable card equipped with tons of features for students. It is a cash back rewards card that will let you earn higher than the standard 1% for every dollar you spend. You need to pay your balances on time, though, to keep your rewards. Clearly, it teaches students how to build their credit history the right way. This is also ideal for students who are planning to study abroad since this does not have foreign transaction fees.

Citi® Dividend Platinum Select® Card for College Students

You can apply for this card even if you have no co-signer. However, you must meet the income requirements to qualify for the card. This is a well-known rewards card especially designed for students who are establishing their credit history. While you spend credits on purchases at drugstores, gas stations, supermarkets, and others, you earn 5% cash back during the first six months of card opening. There are rotating categories that you can sign up for to earn more bonus points. All other purchases you make that do not fit in the category will still be rewarded.

Discover® Student More Card

With this card, you are permitted to present a co-signer in case you are below 21 years of age and are not earning income to pay your bills. The interest rates are competitive, even for those who do not have credit history yet. The average credit limit is reasonable. The not too high limit keeps you away from being lured to spend more than you can afford. The rewards are great just like most student cards, but note that it is capped at $1,500 only.

Wells Fargo Cash BackSM College Visa® Card

If you have good credit and you wish to maintain it, this is a good card to consider. It is one of the few cards that have low interest rates for students. This is not recommended for those who are planning to go and study abroad, though, as it charges high foreign transaction fee. There is an introductory period where you get to purchase whatever you want without incurring interest. Note that you have to make at least the minimum payment to take advantage of the offer for six months.

The best credit cards for students not only come with great rewards. They should also have reasonable fees and educational tools to help the young ones manage their credit responsibly. When searching for your own card, carefully weigh the features of each and pick the one that can give you the most rewards. 

How to Get Quick Approval on Credit Card Applications

Getting a credit card used to be easy, but times have changed. Many creditors now have tough requirements that consumers must meet to get approved. Smart people know that sending applications cause “hard inquiries,” which can stay in the credit report for years. One simple trick is to simply evaluate the odds of getting approved for a certain card before wasting your time and the creditor’s as well.

Here are the things that you must do to get quick approval on credit card applications:

Understand Why Your Card Application Might Be Rejected

Once you find the card that contains all the features you are looking for, don’t sign up for it immediately even if it says you are pre-approved. Before you fill out the online forms or do the paperwork, you should know that there are common reasons why people get turned down. These include:

• Bad credit rating 
• Insufficient income 
• Delinquent accounts 
• Unstable financial history 
• Too many inquiries over a short period of time

The final point denotes that an individual is in desperate need of credit – in short, it is an indication that the applicant is short of cash. This is a type of risk that banks are not willing to take. After all, how can you repay the amounts that you charge against your card if you don’t have money?

Know Your Score

Your credit score plays a vital role in the quick approval of your application. Many issuers turn down those who have really bad scores. As such, before sending in any application form, make sure to check first your credit score so you will have an idea on whether you might get approved or not. To know your credit score, simply get a copy of your credit report and check from there. Your credit report is available to you for free once a year.

Improve or Maintain Your Rating

If you have excellent rating, be careful not to make a mistake that will cause your score to plummet. On the other hand, if you have bad rating, you should raise your score to help you get a card with favorable rates and qualities. Whatever your situation is, here are methods that will help your score:

• Pay on time 
• Don’t carry balances so you will not incur debt 
• Keep your credit utilization ratio low (30% at the most) 
• Don’t apply for too many cards at the same time 
• Pay all your debts and other loans from other companies 

In general, there are four groups of scores, namely:

• Excellent credit – Your score is 780 or above, allowing you to pick almost any card that you want.
• Good credit – You have at least 701 FICO score to 779. Most cash rewards cards will approve you at this point.
• Average or fair credit – Scores from 600 to 700 may get denied but there are cards that may consider such range.
• Poor or bad credit – If your score is under 600, you may not qualify for any card except for those that are meant for people with bad credit. Typically, they have higher APR and other fees. A secured card is also an option.

 The most significant thing to remember is to check the requirements of the card. Most lenders look at the score first so if you apply for a card that’s not suitable for your rating, you will definitely get rejected.

Questions to Ask Before Deciding to Get an Airline Miles Credit Card

Traveling is fun but only if you have enough money to spend for the activity. In this day and age, it is almost a necessity to look for a method that could alleviate the burden of huge expenses. One popular way of decreasing the costs of travel is through the use of airline miles credit cards. As you may have observed, these types of cards are especially made for air travel and are issued to provide people help in reducing travel costs when flying with a particular airline.

If you are thinking about getting a credit card and you are eyeing an airline card, there are a few factors that you should consider. First, ask yourself the following questions to determine whether this type of card is good enough for you:

Question No. 1: Are you a loyal customer?

Airlines typically have frequent flyer programs to attract new consumers and to retain old ones. As you continually use their services, you will build and rack up on your frequent flyer miles. Usually, these miles have cash values, which you can swap to airline tickets and the like. If you are a loyal customer, meaning you generally fly on a particular airline, an airlines credit card will do you good.

Question No. 2: Are you a frequent flyer or purchaser?

Many confused consumers get an airline card since they typically have higher bonuses than traditional credit cards. Before you get your own plastic, ask yourself whether you fly more or you purchase more. Those who regularly travel by air would benefit from an airline card without question. However, if you travel but you also make purchases with your card, the decision may be a bit difficult to make.

One good technique that you can practice is to examine the rewards programs of your card options. Look at the ways on how you will earn more points. There are cards that could be rewarding to both flyers and purchasers. It is up to you to make your choice, depending upon your needs and preferences.

Question No. 3: Are you ready for the costs?

Needless to say, airline cards are expensive. They have higher APRs than conventional credit cards. Most of them also have other fees, such as annual fees, late fees, and penalty charges among others. The APRs need not be a problem to those who dutifully pay their bills each month. Missing a payment is definitely not an option with this type of card. If you do, the points or miles that you have earned become insignificant due to the high penalty rates.

Some airline cards do not have annual fees, which make them a bit more advantageous than those that carry such fee. However, if you look at the rewards, a no-fee card usually have inferior rewards than those with annual fees. Calculate the total amount of rewards that you need to earn to eclipse the annual charge. That way, you could find out if the card is a true rewards card or not.

Airline credit cards are created for travelers who frequently travel with a specific carrier. It comes with highly coveted perks, such as free seat upgrades, priority boarding, and VIP treatment. However, they come with high fees so be sure you can afford the card and follow the strict rules before you sign up for one.