The Possible Business Credit Card’s Disadvantages

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As a business owner, you already be aware about the popularity of business credit cards in the market.  Most financial experts suggest small business entrepreneurs to apply for a business credit card as an easy way to start building a business credit.  Business credit cards are also considered as a convenient mode of payment for businesses, an easier way of monitoring business expenses, and a great tool for separating your personal money from your business finances.  But what about the drawbacks of business credit cards?  What possible disadvantages should you be aware of?  Presenting the risks of small business credit cards is not meant to discourage business owners from getting one.  Instead, being aware of these risks can help a business owner to become more responsible with the use of business credit cards.  Thus, consequences and problems that result from incorrect use of business credit cards can be avoided.The Drawbacks of Business Credit CardsThe personal liability clause.  When you apply for a business credit card, you should know that there is a personal liability clause that’s included in your contract.  This means, you are personally accountable for all debts that would be incurred using your business credit card.  This also means that your personal credit history can be affected if your company fails to keep up with your payments on your business credit card account.  If you have employees working for you, you should definitely be concerned about this.  Business credit card companies provide supplementary cards that can be distributed to certain employees.  However, take note that if your workers abuse your business account for their personal expenses,  you can still be held liable for its repayment.  Therefore, it is recommended that as soon as you started the business, register your company for a corporate credit right away.  It can take a year or more before you are completely set free from this personal liability so the sooner you establish your business credit, the sooner you can be free.You can’t dispute charges on your account.  Since a business credit card is considered to be owned by a company, not by an individual, it is excluded from the Consumer’s Bill of Rights.  Consumers are entitled to dispute unauthorized charges on their account.  However, as business owner, you can’t exercise this right.  Remember, if you incurred unauthorized charges in your account, you may call the merchant involved and explain your situation.  However, if the merchant refuses to acknowledge your complaint and leave those charges in your bill, you would be liable to pay for them.  Therefore, you need to be careful about using your credit card for payment especially when dealing with online dealers and suppliers.The risk of credit card debt.  Getting stuck in credit card debt is a dangerous thing.  Because of the high interest rates that you incur each month, along with the additional charges (late penalties, transactions fees, etc), you can easily find yourself in bad debt in just a few months.  The risk is even greater if you own more than one business credit cards.Therefore, if you do decide to get a business credit card, you should pay special attention on how you keep up with your payments.  Avoid carrying over your balance from month to month.  Instead of submitting only the minimum due required by your card, make it a point to settle your monthly balances at all times.Copyright © 2009 www.businesscreditcardsite.com

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ABOUT THE AUTHOR

Pamela Williams is a Loan Consultant, Internet Marketer, Writer and owner of BusinessCreditCardSite.com, a finance company in Las Vegas, Nevada that provides support for businesses all across the US particularly with obtaining credit cards for business. Visit http://www.businesscreditcardsite.com
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