Where can I find business credit card offers?

Business and personal credit card offers are everywhere! Large envelopes fill your post box while electronic missives creep into your e-mail, despite your best efforts to filter your incoming messages. Every website you visit features pop-up offers for credit, insurance and other financial services.

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Credit card offers are prominently featured on radio, television and in most every newspaper and magazine in general circulation. There are even credit card ads on billboards! Sorting through what amounts to literally hundreds of these credit opportunities can be a daunting, difficult, and confusing task.

Who else provides reliable information?

Financial magazines, such as Forbes, and Money Magazine, now affiliated with the CNN News Group, provide consumers with up-to-date information about a wide range of business services including credit cards.

Do all businesses use credit cards?

U.S. Government statistics show that as of 2009:

Credit cards were used by 83% of small businesses
41% of business owners also used personal credit cards for their business expenditures
20% of all U.S. based small businesses applied for new credit in 2009

Next to checking accounts, credit cards are the most popular financial tools for small business owners and have become the principal source of business financing.

Can businesses readily obtain credit cards?

Yes, but with much stricter requirements. Of those businesses that applied for new credit in 2009, more than a fifth of them were declined and unable to extend their credit further. Another 6% of applicants refused to accept the credit terms or rates offered them by credit card firms.

Almost half of American businesses (44%) used credit cards as a financing tool in 2009 as compared to only 16% in 1993. Credit cards have replaced business profits as the main source of new capital and financing for U.S. business owners!

Why has American business shifted to credit cards?

One of the major industry changes brought about by this decade’s banking crisis in the tightening of lending and credit policies across the board. When the bottom fell out of the marketplace, many individuals and businesses, small and large, were forced into bankruptcy. At the very least, the businesses that survived had to learn how to make do with less.

Americans had been living on credit for too long, and with sweeping changes in the credit markets, came the need to find alternative credit sources for purchasing and short-term financing. Credit cards, in the past, had always provided quick and easy ways to secure needed supplies and business services.

What were some of these changes?

Bank lending practices have reverted to relying on more traditional borrower qualifying. Business owners and other borrowers must now show a strong credit history, sufficient means to repay any loans taken out, and reasonable collateral. These new, stiffer requirements have forced many local and regional banking concerns to almost cease making new business loans.

Haven’t credit card terms changed as well?

Yes! Credit card terms have changed to a great extent. Some of these changes were meant to protect consumers, but other changes opened the doors for banks to increase fees and more closely regulate consumer accounts. Today’s credit cards feature higher interest rates and lower credit limits than their predecessors of a decade ago.

In 2009, 60% of business organizations reported that rates on their credit card accounts had increased. 23% reported that their spending limits had been reduced. While overall credit card usage continues to grow, Americans are constantly on the lookout for other ways to finance personal and business expenses.

Are there alternatives to traditional credit cards?

Yes! Over the last decade, debit cards, featuring Visa or MasterCard logos, have all but replaced paper checks for purchases and bill paying. Not only are these cards more convenient than paper checks, they offer vendors the additional security of instant authorizations and approvals, just like credit cards.

While there are some benefits associated with debit cards, consumers are limited to the amount of money on hand in their checking or savings account. In response, more and more business owners are turning to prepaid credit cards.

What are prepaid credit cards?

Prepaid cards are rapidly growing in popularity and are now available through American Express and many other prominent banks, thrifts and credit unions. These are secured credit cards, paid for in cash and good for most any amount the cardholder is willing to invest. These cards carry all the benefits and features of regular credit cards, without the high interest charges and other fees usually charged by credit card issuers.

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