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Business Credit Card Offers
In addition to alleviating accounting nightmares, business credit cards allow growth and organization for small business owners. The advantages to having a small business credit card for your organization is that it allows you to track spending of employess and for goods purchased for daily operations. Advantages for accounting include the ability to categorize travel, entertainment, utilities, office supplies and more as most issuers have sophisticated online banking platforms that allow you to easily download statements and reports into Quickbooks or whatever accounting utility software your CPA or bookkeeper uses. In this economy, these offers are not readily available like they were a few years ago. To counteract this, many small business owners have opened personal credit card accounts that they use strictly for business use. This in essence allows them to seperate business from personal expenses while providing funding for growth.
How to Back Door Your Way Into a Business Credit Card
If you apply for a business credit card and you are not approved immediately, there is another approach that you may take. Savvy small business owners that have had this type of thing happen to them explore other ways to obtain business credit. We've already mentioned above that one option is to open up a personal account to strictly use for business transactions. The other method is to identify a personal card that you would use for regular purposes, meaning no business ones. Once you receive your card, use it for everything that you would normally pay cash or use checks for. It's probably best to find one with rewards or cashback because then you earn while you spend. If you use this for everything and payoff your balance in full every month, or even several times a month, in most cases you will attract the issuer's attention. What banks will typically do if you exhibit this type of behavior, especially if it is a rewards card is raise your credit limit. They may even contact you. If they do, they will most likely do so to touch base and see if there is anything that you may need, either a credit line increase or maybe to pitch you on another card. This will be a "courtesy call."
At this point, you'll be in the driver's seat. Explain to them that you want to get a business credit card through them so that you may seperate expenses. In all likelihood they will bite, especially in the case of American Express. This particular outfit has a very interesting business model in the respect that they typically charge merchants higher transaction fees and in some cases act as their own acquiring financial institution. Therefore, the more you spend, the more they benefit. Be advised that when you open your initial account, you will typically have a lower than needed credit limit. Don't worry about this initially. They are very good with working with small business owners through their division OPEN. If they give you what you think is "sub par" for a credit line, you may submit more financial information and they will usually boost you up. If they don't because you are a new business, a run of your credit report and a look at your personal account history with them is sometimes good enough. Otherwise, just spend and pay spend and pay and they will more than likely raise your line within a few months. This approach is coined "back-dooring your way in" in the business credit card world and is quite effective.
Though there are reports all over the place, on the news, radio, tv, paper, etc, that banks are not lending, it isn't necessarily true. Don't believe everything you hear. Yes, it is true that major issuers aren't giving away credit cards to companies like hotcakes like they were in the last decade. They are still giving them out, just in a more cautious manner. They have to be more selective and careful due to the increasing number of businesses that have closed in the past few years. Though it may be more difficult and you may have to submit more information, obtaining a small business credit card is still possible.
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