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What does a business credit card mean to your company? That yourun a legitimate business, of course. It's a crazy paradox: Putcash on the table to pay for a business lunch and you've laiddown real money, but the classier move is to deftly toss a goldcard on top of the bill.
But good impressions aren't all business credit cardsdeliver. CPAs insist putting business charges on plastic helps youlater, when you need to sort out tax-deductible expenses. Then,too, it's whispered that the IRS much prefers seeing this sortof orderly accounting whenever it does an audit. Another plus: Abusiness credit card gives you a "float" between the timeof purchase and the day when you've got to ante up thecash--usually there's at least a three-week gap, but sometimesyou'll enjoy six or more weeks of interest-free use of somebodyelse's money. And in a cash-flow pinch, of course, you can payoff your balances over time--meaning credit lets you buy thatcomputer today, when you need it, even if the company till iscurrently empty.
Spend too much, too fast, however, and you'll be hit withhuge interest charges--which can jeopardize both your business andyour personal creditworthiness. The bottom line: Business creditcards are terrific tools--if you use them shrewdly.
Read on for pointers on where to get--and how to use--businesscredit cards.
Get It Fast
Today, you can use a single, online application to apply for avariety of cards when you visit Quicken Business CashFinder(http://www.cashfinder.com). Lendersinclude American Express and a number of banks offering Visa andMasterCard. Applying for business credit doesn't get anyeasier, and CashFinder is free.
Debit Instead Of Credit
Can't qualify for a business credit card because yourcompany is too young or your finances too shaky? Then get a debitcard. It looks just like a credit card (complete with a MasterCardor Visa logo and your business's name) and makes the same goodimpression. The only hitch: Charges are immediately deducted fromyour checking account. For more details and links to banks thatoffer debit cards, visit:
- MasterCard (http://www.mastercard.com/business/debitbizcard.html)
- Visa (http://www.visa.com/cgi-bin/vee/pd/debit/main.html?2+0)
Square One
Striking out when applying for credit cards? A good way tocreate a business credit history is to start by using a storecredit card. Build up a solid history there, and you'llpersuade other lenders to pony up the plastic. The two biggestnational office supply chains offer cards; call (800) 767-1291to get an application from Staples, or try Office Depot at(561) 278-4800 or http://www.officedepot.com.
Bedtime Reading
Smart entrepreneurs do their research before making heavyuse of credit cards. There are plenty of articles available forfree on the Web to get you thinking:
- Shop: The Card You Pick Can Save You Money. Get thisvaluable white paper on credit cards from the U.S. Federal ReserveBoard (http://www.bog.frb.fed.us/pubs/shop).
- Applying for Business Credit? Know Your Rights. Read afast summary of borrower's rights--including how to find outwhy a bank denied your application--from the Better Business Bureau(http://www.bbb.org/library/credit.html).
Money Talks
Interest rates vary from single-digit amounts to more than 20percent annually--and that can make for a difference of hundreds ofdollars a year. Want to know if you're getting the best deals?Before taking on a new credit card (or to measure how your currentcards stack up), check out BankRate Monitor (http://www.bankrate.com), anindependent firm that specializes in analyzing the terms offered bythe nation's banks.
