This post is a contribution from David at CreditCardCompare.com.au, an Australian comparative website offering a choice of credit cards for businesses with rewards including air miles and insurance.

A business is a living entity in the eyes of the financial sector and all tax collection authorities. Until certain steps are taken to register the business with a tax identification number, the financial institutions do not recognise the business as worthy of credit. Just as a young person must start at the bottom of the credit ladder and build a record of dependable debt repayment habits, a business must follow the initial steps necessary to have a business credit rating.

Many business owners have been surprised when a loan is needed to sustain the business. The bank will deny the loan simply because the business does not exist in the business credit agency databases. The use of business credit cards can aid in establishing the business credit rating if certain prerequisites are filled. When seeking to acquire a business credit card account, follow these recommendations: Continue Reading »

While consumers don’t have to worry about credit card rate increases, small businesses still need to closely monitor their credit card statements.  Why?  Because small business credit cards aren’t covered by the CARD Act, credit card companies can increase interest rates at any time, for any reason.

I recently found a rate increase notice on page 9 of a 13 page credit card statement from American Express.  Presently, the rate on this particular business card is a very reasonable 12.24%.  On August 1st, the rate increases by nearly 30% to 16.24%.

If I want to opt out of the interest rate increase, I have until August 20th to call in and close my account.  This would allow me to repay my current balance at the lower interest rate.  However, if I want to keep my card open, I must accept a higher interest rate. Continue Reading »

According the recently released Federal Reserve Survey of Loan Officers, major banks are making it increasing difficult for small business owners to obtain credit cards. While this is clearly a major issue, and one small business owners have been facing for some time, it may actually help small business owners who opt to use personal credit cards instead of business cards.

Unlike personal credit cards, small business credit cards do not provide the same protections to cardholders. For example, a bank can raise rates on current balances held on a small business credit card at any time, for any reason. Thus, with a small business card, it is quite possible to have interest rates increased from 10% to 29% whenever a bank may desire to do so. The same is not true for consumer credit cards. Banks cannot raise rates on pre-existing balances and must provide 45 days notice before raising rates on future balances. Continue Reading »