Every business owner needs money. And very often these money come form loans and credit cards. However, it is very important to know how to separate your personal finances from your business. And although your business may be getting a really amazing offer from a credit company or a bank, there is always a risk for you to get tricked. That is why you should always be sure that you are asking the right questions and receiving adequate answers. Here are some of the most common credit card traps that you should definitely avoid.
Personal Liability risks
A very common practice in business credit cards is to require personal information about your previous credit history. In case you have poor credit, you will have to find a business credit card that will not ask you to provide such information. On the other hand, if you have good credit, you will increase you chances to get an approval for a credit card of your own choice. Also, you will have to make sure that you will be able to manage the credit card line well, since any charges on this card will require you to be personally liable. Depending on the lender, after several months (or years) of regular payments, this aspect of your card may be removed.
Big bonuses with a catch
Very often you may be offered to open a bank account and get a certain amount of your money back. And although it may sound really tempting, there is always some catch (which of course in many cases you will understand after you sign up all the documents). What they will not tell you is that if you want to receive your $100 or $200 back, you will need to charge some amount of money in your business card. And sometimes it can be very difficult, especially if they ask you to charge $1,500 in purchases when you have just started up.
The so-called ‘gold cards‘ are very popular during the last decades. But although in the past they were associated with prestige and luxury, today many of them are actually pretty meaningless. That is why you should always choose your business card according to your personal preferences. Try to consider the benefits that will be useful for you and your business, such as low fees or rewards. Otherwise, what would be the point to buy a credit card if you cannot take advantage of its benefits?
Low interest rates? Really?
When choosing the right business credit card for you or your small business, one of the most important things that you should definitely pay attention to is the rate of interest. In recent years most banks draw their customers by offering low interest rates. But are they really so ridiculously small? Unfortunately, no! Once again, you will have to look a bit closer and pay attention to the fine print. In most cases it says that these low rates are only available to applicants with the best credit. In other words – the low rate they are using to get your attention is usually not the one you will get.
[box_light]Emma Trevisani is keen on topics related to business. She loves to read about business and markets. She currently works as a CEO of http://www.hirehousecleaner.co.uk/house-cleaner-south-west-london/ and she loves her job because she learns new things every day.[/box_light]