Business Banking: How to Choose the Right Business Credit Card

For small startups looking to start a business in the United Arab Emirates, having the right business credit card is just as important as finding the right bank to manage all your financial needs.

But with countless choices available for startup firms, selecting the right business credit card can be overwhelming. Leading banks in the UAE, for example, offer a wide array of financial solutions for your business needs – including that essential business credit card.

Before you apply for a business credit card, here are some valuable pointers:

1. Master the business credit card basics

There are certain rules that must be applied to choosing a business credit card to ensure you get the one for your business. As a business credit card is a great way to establish a credit history under your new startup’s name, the first thing you should do is figure out your credit score.

It is equally important to never use your business credit card for personal expenses. Use it solely for business-related purchases. Similarly, pay your bills on time and in full to avoid any unnecessary interest fees from accruing.

2. Know the different types of business credit cards

Business needs will vary according to industry and size. In respect to this, understand that there are no one-size-fits-all solutions when it comes to business credit cards. When searching for the right card for your business, you must understand exactly what your specific business needs are.

To help you narrow down your search, here are the different types of business credit cards available:

• Corporate cards will not be suitable for your business needs as these are specifically assigned to multi-million dollar firms. Unlike a business card, there is no need for a personal guarantor when acquiring a corporate credit card.
• Low-interest credit cards are the ideal business card for startups who find it challenging to pay off their balance in full every month, yet need additional capital. Seek out zero- or low-percent APR credit cards if you have difficulty clearing the balance monthly.
• Special interest credit cards are a great option to meet a specific business need that you require. Some special interest credit cards work in partnership with alliances to offer discounts or points for business-related purchases such as frequent flyer miles.
• Charge cards are often comparable to the standard business credit card. Meaning, the balance must be paid in full every billing cycle. Failure to remember or pay the bill at the end of every month will come with strict penalties.

3. Identify key business expenditures

Following on the last point, understanding how your business spends its money or its biggest operating costs will give you a glimpse of the right type of credit card for your business.

If your business entertains a lot of clients or entails a lot of long distance travel, then a card with points or good rewards will prove beneficial. 

Likewise, tracking operating costs will highlight where most of your business expenditures come from. If your business requires multiple services (phone, internet, etc.), then opt for a cash back credit card or a card that provides bonus cash back on your business-related expenditures.

4. Consider the annual fee and other “hidden” costs

The fees and costs of maintaining a business credit card will vary according to the provider. As a new startup, certain business cards may be available to you with an introductory zero percent annual percentage rate (APR) for a certain period. Be sure to go over the fine print to understand the provider’s terms and conditions to make the most of your business credit card.

Reading the fine print will clarify other fees that may rack up the cost of owning a business credit card. These fees may include foreign exchange fees or processing fees for international transactions. Late payments, of course, will incur heavy penalties.

5. Compare options online

The power of the internet means that the array of credit card options available for your business can all be sorted according to business requirements with just a few clicks of the mouse. 

Trusted commercial banks and credit card comparison sites can assist in determining the right business card to match your criteria. They will even provide all the information you need to make a decision. What’s more, many give you the option to directly apply online for your desired credit card service.

So for those looking to start and grow their business in the UAE (or anywhere else in the world), business credit cards are flexible finance solutions to establish credit history, expand available credit to grow your business, and access valuable rewards to encourage growth. The tips above can be made into a recommended checklist to ensure you select the right card for your growing business.

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