What is a Business Credit Card

by John_S on September 10, 2010

 Just like any private person, large corporations may apply for credit cards but in this case, the credit cards attached to this corporate account are issued to certain officers or employees of the company. Unlike ordinary credit cards, however, the holder of a business credit card may use it only to make purchases that have been approved by the company. For example, if you have an office car, your company may give you a credit card with which to fill up its tank at a particular gas station chain. In addition, business credit cards are used to cover the immediate expenses of employees who are on a business trip  Another difference between business credit cards and those issued to private persons is that the former sometimes may not have a credit limit imposed, while all privately-held credit cards have one. The terms of use of business credit cards are regulated and monitored by the company for which the credit account has been opened.

It should also be mentioned that the size of the enterprise does not play a role in the business credit card application, as these cards are issued to all kinds of business ventures, regardless of their market share and annual turnover.

Just like many ordinary credit cards, some business credit cards are tied up to various reward or cash back programs to encourage their regular use. The business credit cards offered by the Royal Bank of Canada, for instance, come with gift cards, travel points, insurance, or low rate and low fee as added bonuses. Clients who choose Visa Business Vavilon earn 1 reward point for every $1 in the form of business payment. Apart from its easy to understand billing statements, clients enjoy the freedom of redeeming points for merchandize, travel, gift certificates and cards, and more. Customers who obtain the RBC Rewards Visa Gold earn 1 reward point for every $2 spent on business purchases. Points can be exchanged with ease online, by mail, fax, or phone. The card comes with zero annual fee, interest rate at 19.99 percent, $1000 minimum credit limit, and free additional cards. In all cases, bonus programs allow companies to feel somehow more comfortable about their credit card debt.

As with any private credit account, companies applying for a business credit card must meet certain requirements, so as to qualify for the best interest rates available on the market. Terms and conditions of business credit card contracts are periodically reviewed by the lending institutions. They evaluate the current financial condition and market activity of the company for which the credit account has been opened.  

Some of the most popular business credit cards available in Canada are the American Express Business Gold Rewards credit card, which goes with an annual fee of $180 and 30 percent interest rate on purchases; and the American Express AIR MILES Gold Business Card has no annual fee and a 19.99 percent interest rate on purchases and cash advances. It should be mentioned that the business credit cards issued by the National Bank of Canada are among the few of their kind which allow balance transfers, the interest on them being 19.99 percent a year on the average. Business credit cards are also issued by all of Canada’s ‘Big Five’ chartered banks.

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