Charge It: 8 Rules For Managing Business Credit Cards
   By Alex R. Merriman

Paying with plastic is standard operating procedure for most small-business owners. Credit cards help you track expenses, ease online purchasing and give you a few weeks of float before the bill comes due.

But like everything else in your business, credit cards require managing. To get the most convenience from your credit cards follow these eight rules.

1. Get a business credit card
   Don’t use your personal credit cards for business purposes. Get a card specifically for your small business. Have the card imprinted with the name of your business. Keep business purchases separate from personal purchases.

2. Compare cards
   Be a smart shopper for credit cards. Choose a card that meets your needs. If you plan to carry a balance, look for a card with a low interest rate. If you travel frequently for business, get a card that rewards you with airline miles.
   
   Bankrate.com can help you sort through all of the credit card offerings. Just go to www.bankrate.com. Click the “Credit Cards” link in the toolbar. The Web site will help you compare credit card features such as interest rates, grace periods, annual fees and more. It also provides telephone numbers and links to Web sites for the card issuers.
   
   If you’re a member of a professional or trade association, check your member benefits. Many organizations offer business credit cards to their members.

3. Avoid cash advances
   Use your business credit cards as a convenience, not as a source of cash. Interest rates on cash advances are sky-high and always more than interest rates on purchases. When your small business needs cash, secure a short-term bank loan or a line of credit.

4. Get rewards Many credit card issuers offer reward programs. Choose a card that gives you the type of reward you’ll actually use: airline miles if you’re frequent traveler; free magazines for your waiting room; cash back for those of us who are penny-pinchers.

5. Save receipts Get receipts for every credit card transaction and file them for tax recordkeeping. Credit card statements alone aren’t enough to prove business deductions if the IRS comes calling. Your receipt shows what items you actually purchased for your business.

6. Watch those fees Credit card companies are infamous for adding and increasing fees. Avoid them if you possibly can. At the very least, minimize them.
   
   In addition to annual fees and late-payment fees, be on the look out for:

   	•	Fees for a credit limit increase
   	•	Inactivity fees if you use your card infrequently
   	•	Fees for paying off a balance
   	•	Foreign exchange fees (usually 2 to 3 percent of your purchase) when you use your card in another country

7. Read the fine print
   Credit card issuers are getting more aggressive about changing the terms of card usage. The issuers can legally change the terms of your card with only a 15-day notice. Many card issuers have slashed their payment grace periods from 25 days to just 20. Others have increased their late-payment fees. Some card issuers now reserve the right to bump up your interest rate if the company discovers that you’ve been late paying any other bills. You won’t know about any of those changes unless you read the fine print, which is usually buried in the inserts that come with your monthly statement.

8. Words of caution
   If your business credit card gets lost or stolen, act quickly. Call the card issuer. Request that your current card be cancelled. The issuer will provide you with a new account number, and you’ll get a new card in the mail within about 10 days. You shouldn’t have to pay a penny for this service.

(Posted August 2004)

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