Posts Tagged ‘Business’
The Naked Truth About 0% Business Credit Cards
Zero percent APR credit cards for business are continuously advertised in the market today and more and more card holders are enticed to own them. Should you really make the switch to a zero APR business credit card? Will zero percent interest rate cards really save you money or will it cost you more? What is the truth behind a 0% APR business credit card?
The Naked Truth
While it is true that you can save on paying the additional interest rate with a zero interest card, caution must still be taken. Just because a business credit card offers a zero percent interest rate doesn’t mean that all fees and charges will also be reasonable. In fact, a zero interest card may impose doubly high charges on penalty fees, transfer fees, and other costs.
Also, the zero interest may only apply either on purchases or on balance transfers. If a card offers zero interest on balances transferred from other cards, the interest for new purchases you acquire can be expensive or it can also be the other way around.
Furthermore, the zero percent interest rate will not be applicable for a long time. Some cards may give a six-month period or a 12-month period for you to enjoy the zero percent interest. But do you really know how much the interest rate would be after the introductory period expires? Some business credit may catch you off-guard and you may find yourself stuck with a card that started with a zero interest offer but ended up with an unreasonably high interest.
Choosing Your Business Credit Card
Thus, one can never be too careful when choosing it. All card issuers are mandated by the law to disclose all their rates and fees in the card agreement. But the problem is, not everyone actually takes the time to read this entire document, which is often printed in very small letters that are hard to read. Most card applicants just scan through their card terms and agreement, thinking that it is too long and is a waste of time reading.
But such an attitude can really put you at risk. Remember, not all cards are after the best interest of their clients. In fact, most cards with zero percent interest somehow find a way to bounce back from the zero percent rate they offer through other costs in the card. Remember that the zero percent interest is just an initial offer. If there’s a catch awaiting you, you will not know until you read the complete terms and conditions of the card. You don’t want to be stuck with a business credit with sky rocketing rates just because you did not take the time to read the agreement when you signed up for it.
Another thing to remember when applying for 0% interest credit card for business is the timeliness of your payments. Usually, cards with zero interest impose strict rules of payment. When you fail with even a single payment, you may get disqualified from getting the zero interest for that month. Also, you may get charged with an additional penalty fee for late payment.
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Business Credit Card – No Personal Guarantee
Do you know what business credit card – no personal guarantee means? The concept of a business card with no personal guarantee has to do with applying for and being approved for a business card without having the business credit history that most business credit cards require for approval. This requirement can be daunting when it comes to business card applications, because if you cannot personally guarantee your application for your business card by proving that you have personal good credit or good business credit, then you may have difficulty getting the credit help that you need, preventing your business from getting the funding that your company requires. The chances of obtaining a new business card was once slim to nothing if you were not able to personally guarantee your credit, but things have changed now that you can obtain business cards with no personal guarantee.
There are a few things that you will be able to do regarding finding a business card even if you do not have much of a personal credit record to speak of. First and foremost, you should make a point to get your business registered with all of the credit reporting bureaus such as Dun and Bradstreet. While you are automatically reported to personal consumer credit bureaus, the same is not true when it comes to businesses and the accompanying credit bureaus. Dun & Bradstreet does for businesses what Experian, Equifax and Trans Union do for consumers.
Since you are just getting into the industry, and because your business has a direct link to your personal credit until you can build up your business credit, it is absolutely vital that you keep your personal credit in good shape. There are credit opportunities out there that offer business card no personal guarantee offers. Since you are new to the industry, if you can find one of these offers, it will likely benefit you quite significantly, but only if you make sure to read the fine print in order to make sure that you understand what the card has in store for you.
One of the best ways to get a business card without requiring a personal guarantee is to work with the bank that you are already doing business with when asking for a credit card. Keep in mind, however, that any new business cards that you get will probably come equipped with higher interest rates because businesses without any credit are risky borrowers. If this is the case, just worry about getting a modest credit line until you can build up some credit. When you cannot personally back or personally guarantee your credit, then you will need to make small sacrifices for the purpose of getting the business credit that you need, even if it does mean larger interest rates and smaller limits until the point where you can back up your credit worthiness when dealing with a lender.
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