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What a Start-up Business Owner Should Know about Credit Cards When you are in the start-up phase of your business, unless you are bootstrapping your business or using advance payments from customers, there is always a need for funds. In moments when there is a need for quick cash in your business, entrepreneurs are quick to fill out credit card applications, without taking a look at some of the aspects of that card that can come back to haunt them later. Before you sign up for any credit card for your business, here are some things you need to know
Personal Credit Score Your personal Credit Can affect your eligibility- Entrepreneurs tend to make the mistake and believe when applying for credit cards, only the business credit is looked at. However, this is not the case, especially with a startup that may not have any business credit history. Ensure that your personal credit is good and that the credit bureaus have the correct information. If you have bad credit, start working to improve it. And when applying for loans or credit cards look for subprime / bad credit lenders.
Review Rates / Terms / Rewards Offered You need to understand the interest rate- different credit cards have different rates of interest, also depending on your credit score the rate can be adjusted. There are different factors influencing the rate you get such as, current financial situation (rarely do they ask for documentation, but if you tell them you make over $100K a year, be prepared to prove it!) your credit score, and your time in business. As a startup get into the habit of asking each lender if they work with a startup business. There are some credit cards that just like bank loans, require several years in time in business. Some credit cards also offer cash back incentives as well as other rewards programs to get people to sign up. However, before doing so, one must take a look the rate of interest, fees associated with it and judge if the reward offered will really benefit your business. Read more: http://www.startupbusinessloans.com/what-startup-business-owners-should-know-about-businesscredit-cards