Should I Apply for this Instant Approval Business Credit Card?

I know it can be tempting to apply for that instant approval offer you receive in the mail but I’m hoping to give you a moment of pause in order to consider several important options before you submit that application.

As more business credit card offers enter the market to compete for your business it’s important for you to consider all the business credit card options and compare the costs to the benefits before you apply.

Here are just a few to take into consideration:

• Cash Back – Many business credit cards now offer cash back rewards. For example Chase’s new InkSM Cash has unlimited cash back and accelerated earnings on its card. This is a great perk because it rewards you for spending on everyday business purchases that you do already. Make sure you understand what the card’s limitations are and read the fine print before you apply.
• Frequent Flyer Mileage – Getting frequent flyer or airline miles cards is a very popular perk for business travelers. Once you accumulate enough points you can redeem them for airline discounts or free nights at participating hotels. Make sure you know if there are any limitations prior to applying.
• No Annual Fees – Many business credit cards now waive the annual credit card fees. Keep in mind that your credit score needs to be strong to get these credit cards. However, if your business pays its balance in full every month then this is definitely the way to go if you can. In effect, if you pay your balances, you get the credit card for free.
• Zero Percent Balance Transfers – This can help you reduce your high interest debt. Be sure to never miss a payment or you’ll immediately lose your interest free terms and have to pay the full rate.
• Payment Reporting – Traditionally, the majority of business credit cards in the marketplace report your payment history and revolving debt to your personal credit files and not to the business credit bureaus.

However, some companies have started to catch on to the new world of business credit cards like CSI MasterCard, JP Morgan Chase and American Express. They understand that business credit cards are for business purchases and any debt incurred should only report to business credit reports not your personal one.

When you apply they check your personal credit scores, but your payment history and debt report to the business credit bureaus. This is what every small business owner like you should demand from a business credit card.

One important catch is if your accounts become delinquent then these leading credit card companies will report the delinquency to your consumer credit bureaus as well.

Finally, keeping liability strictly tied to your business can be accomplished with no personal guarantee business credit cards. There are less than forty of these types of cards available and you will need to have a strong business credit file in order to qualify.

With the growth in business credit bureaus, data suppliers, and business credit files across the country more and more business credit lenders will have to supply an ever growing demand of new cards that will have to measure up to the needs of today’s small business owner.

I encourage you to choose only the cards that will best serve the needs of your business while supporting the growth of your business credit file and limiting personal liability. Remember, an instant approval offer may sound good to you but it may not serve the needs of your business.

Marco is founder of the Business Credit Insiders Circle which helps small business owners start business credit.

You may contact Marco directly at: ceo@startbusinesscredit.com 

Follow Marco on Twitter @MarcoCarbajo and read more of his insights on building business credit.