Credit cards have long been an unpopular and untrustworthy financial tool. Things are changing now with several businesses using them to manage business expenses. Startup founders, however, rely on personal credit cards even for corporate transactions because there seems to be a lack of options. Given the number of startups that are cropping up in recent times, it was inevitable to have a business credit card for startups. While this is good news for new business owners, they are slightly hesitant due to the lack of awareness on how to choose the right card for their business.
In this article, we will discuss several factors that startups must look at when purchasing a business credit card for startups.
Evaluate business credit card features
Not all business credit cards are made the same. As each one of them offers unique benefits, terms, and perks, you must evaluate them for your business needs. Some of the factors to compare different business credit cards for startups are:
Rewards or Loyalty program
Whenever you use a business credit card, you are rewarded with points which can then be used to make purchases. After continued or regular use, these accumulated points gain significant monetary value. That is why you must evaluate the reward points or loyalty program of the business credit card for startups. Some cards also offer cashback and other discounts.
T&E benefits
Most businesses use credit cards to manage T&E expenses. Some card providers aim at such organizations by offering exclusive discounts or reward points when the card is used to make those purchases. You earn perks with business credit card for startups such as airline miles, discounted accommodation, and complimentary meals.
Low-interest rates
Business credit cards for startups can be important financial tools to take care of immediate, big purchases. Startups rely on credit availability through these cards to manage account payables and clear the dues at a later date. To maximize this, business credit cards for startups must offer low-interest rates. This way businesses can save money by utilizing credit balance effectively.
Introductory period offer
When a company is in its nascent stage, it will need all the financial help it can get. The same can be expected from business credit cards for startups. Some card issuers provide interest-free credit access as an introductory offer, which could be extended up to a year.
Credit limits
Different business cards offer different credit limits. A high credit limits allow startups to make big investments to get their work started. Tech startups, for example, require significant initial investment to purchase infrastructure.
Check your credit score
The credit score of your business – or the business owner in some cases – is important for card issuers to assess your creditworthiness. Your credit score doesn’t just influence your qualification for business credit cards for startups, but also the credit limit and interest rate. To ensure you get the best offer, check your credit score.
Research available business credit cards for startups
The market today has a number of credit card options to choose from. When you decide to purchase a card for your startup, do thorough research into every available option and assess them based on different factors that we had earlier discussed. You can use third-party tools and community portals to check the reviews of every card.
Understand your credit card usage
Startups can use business credit cards for a number of different reasons. Similarly, there are a number of credit cards each for a specific purpose like T&E expenses. To avoid getting confused between all the options, understand your unique business requirements for a business credit card. Once you have clarity on its usage, you can narrow down your search.
Conclusion
Businesses in a startup stage must be stringent in their financial dealings. They must make purchases within the assigned budget and ignore avoidable expenses. As much as it is important to be prudent, the initial days of the business require significant investments.
To gain such a distinctive advantage, startups must use a business credit card like YES BANK Zaggle Corporate Card. It eliminates out-of-pocket expenses for companies and gives comprehensive visibility into your transactions. Zaggle credit cards come integrated with the spend analytics platform, ZatiX, which allows you to generate insights for data-driven expense management. Some of the benefits of the YES BANK Zaggle credit card are:
- Best interest rate and usage fees in the market
- A generous reward of 5 points for every Rs 200 spent
- Insurance coverage of up to Rs 50 lakhs, and credit shield of Rs 5 lakhs.