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High interest rate All cards have the chance of having higher interest rates and APRs, but business cards are more likely to have these higher fees. Rates depend on how good your credit is, how much credit is available, and which bank you use, but expect to pay a lot more than you would for a traditional business loan. If you plan to pay back the money on time or, even better, every 30 days, this shouldn't be too much of a problem. On the other hand, the average company has a balance from one statement to the next, and the interest rate is a big part of how much it costs them to get money. Fewer safety measures One of the best things about using a personal credit card to buy things is that some come with great protection plans. When you use a personal card to buy something, you might get a complete replacement within 30 days or a more extended warranty from the manufacturer. This is less likely to happen with business credit cards, though. Because they think you'll buy inventory or infrastructure to sell for a profit, they ensure these products don't have extra protections. Other cards have no defenses at all. There may be a few high-end cards that, for an extra fee, offer purchase protection to businesses, but this is rare. Find out if it's common before you assume it is. Risk to Your Credit If you thought you could get a business credit card without letting your live show, you were wrong. Most business cards require an excellent personal credit score, and most reporting agencies will also link your performance to your credit score and history. It's a challenging situation that many business owners need to think about carefully enough. To get a business card, you must have good personal credit and pay that card on time to keep your credit in good shape. Your assets could be in danger if you don't pay for a business card. Adding a business card is a considerable risk, but it can pay off correctly. Trust Management People who own businesses are just those who use credit cards for business. Buying managers, sales teams, and anyone who helps your business buy inventory or assets will need to use your card accounts daily. Giving each worker their card is essential, but they may still need to use it right. Fraud and abuse by employees happen at an alarming rate. Fraud costs companies with fewer than 100 employees an average of $147,000 when it happens, and small businesses, in particular, are more likely to be a victim of fraud than larger ones. Thirty-eight percent of fraud cases were linked to the smallest companies, which is a shocking number. Fraud isn't limited to those in bookkeeping, though that department can have its problems. Any employee with access to a card must be subject to a system of checks and balances to ensure they aren't stealing from the company through expensive reimbursement schemes or other types of fraud. Few chances to borrow money When you use your credit card to build up your credit, getting any other kind of credit can be challenging, so how you use your credit card becomes very important. If you use more than 25–30% of one business credit card, banks may think you are needy, can't pay off your debts, or depend on credit to stay in business. Even if this isn't true, using a lot of credit will lower your business score (and possibly your score) and show lenders that you're not a reasonable credit risk. Also, if you want to get a big, traditional business loan in the future, getting and using a business credit card can get in the way. If you use a business credit card, pay it off every month or keep the number of times you've used it low to keep your options for borrowing money in the future open and affordable. Even with all the bad things said about business credit cards, they are still helpful financial tools for small businesses. They have their place, and if you use them right, you can even improve your credit score, show that you can be trusted, and get access to bigger and better funding opportunities in the future. In short, business credit cards don't have anything wrong with them. However, how you use them could make them wrong. Do your research and decide which card is right, just like any other business or money-making opportunity. Set limits on how much you can spend, and plan to pay back what you owe fairly and promptly. Take extra steps to protect the account numbers for business credit cards and hold cardholders accountable for their charges. Using your business credit card well can be a great way to save money and grow your business to a new level in the new year.