Should You Consider a Secured Business Credit Card?

If you've recently started your own business, you may want
to consider a secured business credit card. Most businesses
nowadays can't operate without credit and mixing your
personal credit with your business credit can be a big
mistake. Unfortunately, most new businesses don't qualify
for unsecured business credit cards, especially if the
business owner has had credit problems in the past. That's
when a secured business credit card can come to the rescue.

What's a Secured Business Credit Card?

Unlike traditional, unsecured business credit cards,
secured business credit cards are guaranteed with a
security deposit. When you open up your secured business
credit card account, you place a specific dollar amount
into a savings account and that savings account is held by
the credit card issuer. The card issuer then sends you your
secured business credit card.

The amount of your credit line depends on how much money
you deposit into the savings account. If you deposit $300,
your secured business credit card will have a credit limit
of $300. If, for some reason, you don't pay your credit
card statement and default on your account, the bank takes
your security deposit to satisfy your debt.

What To Look For In a Secured Business Credit Card

If your business doesn't qualify for an unsecured credit
card, a secured business credit card is the perfect way to
establish credit. However, not all business credit cards
are created equal.

When looking for a secured business credit card, make sure
you apply for one that has reasonable annual fees ($59 or
less) and a reasonable interest rate (less than 12
percent). Because you are securing your line of credit with
a deposit, the bank is assuming minimal risk and that
should be reflected in a lower interest rate.

It is also important that you earn interest on the security
deposit that serves as collateral for the card. Someone is
going to be earning money from the interest your deposit
earns. It should be you rather than the bank issuing your
secured business credit card.

Building Your Credit

When you begin using your secured business credit card,
make sure you make your payments on time, every time.
Because you are just now establishing your business's
credit history, every payment counts and being late even
once can do harm to your company's credit rating.

By using your secured business credit card and managing it
wisely you'll be well on your way to creating a solid
credit history for your company and putting your business
on the right financial path.

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For more tips on business credit cards, saving money and
avoiding getting taken, check out CreditCardTipsEtc.com, a
website that specializes in providing credit card tips,
advice and resources.
http://www.creditcardtipsetc.com/business_credit_cards