Secured Business Credit Cards Offer Businesses Excellent Perks
You’ve probably heard the commercials about business credit cards that offer rewards cards with no interest payments. They make you wonder if they’re really worth it. After all, isn’t the whole point of getting a business card to establish credit? And if you can’t establish credit, how can you possibly use it to benefit your own business? This article will explain why owning your own business credit is so important.
First, you have to ask yourself: Do I really need to have my own credit card? The reason that most business owners feel that they absolutely must have their own credit card is because of the cash back rewards offered by issuers. But the truth is that cash back rewards don’t do much for business owners. In fact, the bulk of business owners never receive any cash back reward from issuers. Here’s why.
Many business Visa cards today actually have a saving account feature. Unfortunately, the majority of them don’t offer a large enough savings account. This makes it extremely difficult to build up significant savings account to make use of your cash back rewards. Even if the savings account is modest, the cash back portion of your credit limit will almost always be a small percentage of your account balance. If you do manage to build a significant savings account, you’ll find that most business owners don’t bother making use of the money. That’s because their saving accounts are under a modest credit limit and their cash back benefits are not high enough to justify making the extra effort.
On the other hand, the majority of business credit cards out there today actually offer a small to medium amount of cash deposit rewards. Again, that small to medium cash deposit is usually dependent on the credit limit that you have available. The interest rates associated with these types of business credit cards are typically very low. In addition, many of the major credit cards offer a variety of attractive incentives, including travel rewards programs and the ability to earn cash when shopping at select vendors. All of these incentives add up to significant savings for business owners who take advantage of them.
Another reason that good credit is so important to get when you want to get a business Visa card is the fact that issuers are very reluctant to issue these types of cards to individual consumers. This is because they don’t trust individual consumers with a credit history that would qualify them for regular Visa or MasterCard credit cards. Therefore, they tend to be very stingy about issuing these types of cards to individual consumers. That’s a good thing! It means that you won’t have to pay exorbitant application fees or other charges just to get approved for a secured business credit card.
Now, the other side of the coin is that secured business cards carry with them some significant disadvantages that you need to be aware of. First, you have to remember that in the case where the credit company does issue a secured business credit card to an individual, they will often require collateral in the form of a home equity loan in order to secure the card. This means that in the case where you fail to make timely payments on the secured business cards, the card issuer can come in and foreclose on your home in order to recoup the collateral. In addition, the penalties and finance charges that are assessed against you in the event of non-payment do not vary greatly from those incurred by an unsecured card. Finally, the APR (Annual Percentage Rate), which is the common middle ground for credit terms, can be significantly higher with a secured business credit card as compared to an unsecured card.
Now let’s move on to what some of the rewards that these particular rewards cards offer. First off, one of the major incentives associated with these particular rewards cards is air miles. With the major airlines consistently charging very high air travel fees and often levying substantial late penalties and excessive penalties on the credit account of the individual who exceeds their mileage limits, the idea of getting reward points for free flying may not be too appealing. On the other hand, the rewards associated with the FBO (First Card Company) Visa debit card may actually be better than those provided by the First Card Company. Here, we refer to this reward point program as the BBVA secured Visa Business Credit Card.
While these secured credit cards are not widely available, there are some specific factors that should be considered when choosing one of these rewards. For one thing, the issuers of these secured business credit cards have made it very clear on their website that one of the requirements in order to qualify for these rewards is that the individual will need to have a small personal business enterprise that has a credit history, along with a positive payment history with a traditional business credit card. Now, most of the individuals that are eligible for these particular rewards will certainly have a substantial amount of business credit available to them. However, the issuers of these secure Visa debit cards also want to make it very clear that even if a person does qualify, that individual will only receive the reward points for that particular business entity only. Now, if an individual can find a traditional business credit card that meets all of the above criteria, then it may not be so difficult to qualify for one of the top secured business credit cards, such as the BBVA secured Visa Business Credit Card.