The Best Steps To Take Before Applying For A Business Card

The Best Steps To Take Before Applying For A Business Card

Without a doubt a business credit card can really be a useful tool for any business owner, small or large. If managed properly these accounts can have very positive effects, both on your companies credit rating and due to the plethora of rewards programs available. These accounts will not harm your personal credit. Here are some other things you should understand before you apply for a business card.

Open a bank account strictly in your companies name. This account history will begin to establish your credit. The owner should also take extra caution to make sure that all bills are paid on time as this will effect credit score as well. Some form of federal documentation may be required for some accounts also. Once you have established a checking account and some credentials, you should wait a year before filling out that final business credit card application. Once a year has passed and the business has established some credit, its time to start looking for the right credit card provider.

As a consumer you should thoroughly examine each credit card offer and make a selection depending on which program features will suit you best. The owner, or whoever is in charge, should also make sure to check out interest rates if the businesses is going to carry a balance. Furthermore, it is also a good idea to have enough money in the bank to make sure that you can always pay your bill on time in case of pinch. After making your choice of account, your next step should be to gather your paperwork. This includes social security number of the owner if the business is still a DBA. If the company is incorporated in any form you will need your federal tax ID number. This number can be obtained very easily online. You will have to produce some of your businesses financial statements that reflect profitability or cash flow. The application will also require a current address and the entities legal name.

After you submit your application, the card companies will give your businesses credit a good look and make their determination. In case of denial, the application can be resubmitted. However, it is always recommended to wait at least one year in order to establish more credit. Any businesses credit card is going to require responsible use. This card should bring many years of benefits should the company closely monitor their spending and make sure the bill is paid on time every month than. Business card tend to have higher APR's than a personal charge card. Also keep in mind that businesses credit cards do not qualify for the same consumer protection programs that non business charge cards have.

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