Secured Business Credit Card News And Information

Secured Business Credit Card

A secured business credit card gives a high degree of assurance for the issuer, making them easy to obtain. The service is offered in situations where the business wants to prevent spending beyond its means; this also means it is an ideal product for a business with poor credit who would otherwise be excluded from cardholding.

This credit service can be provided by institutions other than banks, such as specialized card companies and other financial firms and is therefore easily obtained. What does all this mean, you might ask?  Well, among other things it means healthy competition and a wide variety of offers across the market with widely assorted interest rates.

On the flip side of the coin, a secured business credit card is helpful for building up a positive credit score, and brings a great deal of convenience into your company’s day to day dealings. A word of caution however: make sure your business has a clear policy in place with regard to handling its funds.

How it works:

Depending on the specifics of the secured business credit card you pick, there may be discounts or reward programs available, so do your shopping around. The chief difference is that, with a secured service, you decide how much money you anticipate you will use and then deposit that amount as security towards the card.

Example:  $10,000 towards the secured pledge would give you a spending limit of $10,000.

If for whatever reason your organization is unable to pay the balance promptly, the amount owing will then be taken from the security pledge.

Reduces paperwork.
It is a great way to keep tabs on company spending habits and limit paper work, particularly the paper work associated with unnecessary cash handling, invoices, and expense reports.

Prevents expense account abuses.
Secured business credit cards are an ideal means by which  employee overspending can  be limited, reducing the company’s associated risk and preventing losses that might otherwise go unnoticed.

The possibility of interest on your security pledge.
Some institutions place the security pledge funds in a high interest savings account to provide better value to the consumer. These gems are rare though and might require some hunting and  negotiating.

There are however some drawbacks, such as having to pay the security pledge up front.

If it is not feasible to spend a large quantity of money for activation, then paying down debts beforehand and saving for implementation of the new system is advisable.

High rates of interest.
Given their popularity in groups with high rates of defaulting, the interest rates tend to be less than competitive. Avoid this potential pitfall entirely by ensuring the account is paid in full in a timely manner.

Additional Fees.
Know all the details before you sign on the line, some cards can accumulate lengthy lists of transaction and other fees depending on the specifics of your agreement.

Whatever the credit product is, always read the fine print and know what you are buying.