Pamela Williams |
Pamela Williams is a Loan Consultant, Internet Marketer, Writer and
owner of BusinessCreditCardSite.com, a finance company Las Vegas Nevada
providing support for businesses all across the US particularly with
obtaining business credit cards. Visit www.BusinessCreditCardSite.com |
Pamela Williams
has written 1 articles for SB Informer. |
View all articles by Pamela Williams... |
Compare Business Credit Cards from Charge CardsBusiness Credit Cards versus Charge Cards. Which is Which? Pamela Williams
August 28, 2008
Find the difference between Business Credit Cards and Charge Cards.
Discover their advantages and disadvantages for the consumer.
For some people, the terms “business credit card” and “charge card”
are one and the same. However, although both cards are used as business
financing tools, there are differences between the two. If you are a
business owner, understanding more about these two cards is important.
What are the differences between charge cards and business credit cards?
Differences between the Two
Just like a personal credit card, a small business credit card can also be used to make purchases which you can pay off on your due
date. As a credit card holder, you have the option to pay off your
balance in full or pay only the minimum required by your issuer.
As
much as possible, it is recommended to pay your balance in full to
avoid paying the additional interest rate. Consequently, if you choose
to carry over your balance for the next month, you’ll automatically be
charged with the additional interest charge.
A charge card is
different. With a charge card, the interest rate or APR doesn’t apply
at all. However, carrying over your balances to the next billing cycle
is also not an option. Instead, you are obligated to completely pay off
your charges on your scheduled due date of payment.
Which One is For You?
As
an entrepreneur, which card should you get? Your decision should depend
on your spending style and business needs. For instance, if you want to
put a limit on your monthly spending, a charge card may be the more
practical choice. Since you can’t carry over balances from month to
month, you need to be constantly aware of your charges. If you know
that you can’t afford to pay off that amount by the end of the month,
you’ll see to it that your charges won’t exceed your limit.
On
the other hand, if you want the flexibility of not having to completely
pay off your balances each month, then a business credit card is the
one to get. Aside from these, you can business credit cards with reward
programs that give you the opportunity to earn incentives from your
credit card spending. Take note that despite the flexibility and
convenience of business credit cards, you should not take your payment
obligations lightly. Failing to pay your balances on time means you’ll
also get penalized with expensive late fees. Add to this, if you’re in
the habit of paying only the minimum due on your card, not only do you
incur high interest rates on your account but you are also putting
yourself at greater risk of getting stuck in debt.
If you’ve chosen to apply for a business credit card,
be prepared for the responsibilities that come with it. Remember,
whether you prefer to get a charge card or a business credit card, the
way you handle your account will have a direct effect on how you build
your business credit. Timeliness of payment is equally important on
using both cards.
|