It is unwise to brush off secured business credit cards. Many of these cards provide benefits equivalent to traditional cards. By writing secured cards off as an option only for the businesses with a poor credit history, a valuable form of business credit is overlooked.
Secured Business Cards Helps Build a Good Credit History
A newly established business lacks a credit history. The absence of a credit record can seriously jeopardise getting a credit card. A solution out of this deadlock is a cheap secured business credit card.
Secured Cards versus Unsecured Business Cards
Unlike typical unsecured credit cards, a secured card requires a deposit as collateral. After the completion of the formal procedure, the applicant is issued either the Visa or MasterCard. The secure versions of both cards provide the same spending capabilities as regular cards.
The payment records of secured cards are provided to credit bureaus in a manner similar to unsecured credit cards. This provides the foundation for establishing and building a strong credit rating. A sound rating can go a long way in enhancing the probability of procuring other types of financing in the future.
Why Apply For a Low Interest Secured Business Credit Card
Cardholders are encouraged to make purchases through their secured cards. Not all credit card issuing companies charge intimidating annual fees and interest rates. A little research can reveal suitable secure credit card packages which build the client’s credit in an optimum manner.
Secured credit card holders are often wary of inadvertently revealing the secured status of their cards. However these cards are exceptionally discreet. In fact, there is no avenue for a merchant to distinguish between an unsecured and a secured business credit card. Only the card issuing authority and the cardholder are privy to this information.
A temporary Investment to Build a good Credit Score
A secured business credit card should be seen as a temporary investment. Once a good credit history has been established, the cardholder can apply for other financing including loans and unsecured credit cards.
When Should One Apply for a Secured Business Credit Card?
It is a smart choice to purchase a secure business card when an individual first starts a business. Once the business is poised to expaand, the financial support to catalyze its growth can be obtained by using the positive credit history built by using a secured card.
It is advisable to maintain different cards for personal and for business-related finances. This is done to ensure that in the event of any fraudulent activity occurring on the card, the cardholder’s personal credit ranking is not jeopardized.