Is-your-company-s-cash-flow-blocked--unplug-it-with-a-business-credit-card-
By Hannah Callen
For many small businesses, cash flow is all; suppliers have to be paid, items have to be bought and sometimes you just can't wait for a customer to settle their invoice. At times like these, a business credit card can be the most effective way to manage your cash flow and run your business as usual.

A business credit card allows you the capacity to pay the people whose services you use, without it immediately leaving the company's cash account. This is especially useful if you're waiting for customer payments to clear, or the cash simply isn't there. Using this facility, you can pay for items, supplies and services using the credit available to you through your business credit card.

But how much credit can you access? This rather depends on your credit rating and the type of credit you are applying for. When someone is setting up a business and applying for a business credit card, the card provider needs a yardstick against which to measure your capability to maintain credit. The only reference point they will have at that time is your own personal credit rating. This is a formulated figure based on your spending and credit habits when compared to those of the rest of the population. A positive score will allow you to apply for many types of credit, including a business credit card. Conversely, a negative score can impede and even prevent your application, so it is worth researching your credit score and, if necessary, taking steps to improve it before you apply for a card.

Credit limits come in two forms: a preset limit and one without a preset. Preset limits are good for companies who are only likely to use the card intermittently, not using up the monthly credit available. This way, money is always available in the event that something unexpected suddenly needs to be paid for. Preset cards generally carry an annual fee, but offer less flexibility than those without. Those without do tend to carry an annual fee, but offer more flexibility. The choice as to whether to opt for one or the other must be based on your company's expected turnover and how the card will be used, and by whom.

As well as being useful tools to avoid a potential cash-flow crisis, the business credit card also offers other advantages; thanks to the fierce competition for custom between the financial institutions, Cards now come with a variety of incentives and perks that are aimed squarely at the owners of small businesses. There are discounts on services and products, cashback

deals and even rewards on accommodation or Airmiles. These facilities can all be useful to reduce company expenditure in certain departments, particularly if these are areas of recurring expense. For example, companies whose staff use hotels a lot can benefit from accommodation deals, whilst product discounts might be useful to another.

There is also the obvious advantage for good bookkeeping practice; statements and online billing means that the paperwork involved in card transactions is significantly reduced. In addition, it also keeps the company spending separate from the business owner's spending which can be invaluable during the tax period. A business credit card also offers a certain amount of protection against the receipt of unsatisfactory goods and services, as well as offering protection against credit card theft and fraud. It is often worth contacting your potential card provider to discuss their policies in such matters and to discover the other fringe benefits that are often left buried in the small print, as the focus tends to be on the many money-saving perks that accompany these dynamic pieces of plastic.

Article Source: http://www.upublish.info

About the Author:
Hannah Callen
Hannah Callen is a financial writer that specialises in Business Finance. She likes to break down the day to day financial jargon for the public. You can find out more about business credit cards here

Keywords: business credit card, credit card

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