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Getting a Business Credit Card
Q. How do I apply for a business credit card?
Q: What information will I need to provide?
Q: How long will it take to fill-out the application
and get a decision?
Q: How do I know if my application will be accepted
Q: Are online credit card applications secure?
Q: How many credit cards can I apply for?
Q. What is the average credit limit on a business
Additional Cardholder - Often, it is possible to add an additional card to your business account for use by an employee. The main cardholder is responsible for ensuring payments on the additional card(s).
American Express Credit Card - Also known as AMEX, this company is one of the main international credit card issuers. It issues its own credit cards—unlike Visa and MasterCard.
- Some card issuers will charge an annual (yearly) fee for
use of their card, separate from interest rates on purchases. This is
more typical of charge cards or credit cards with low APRs.
Rate (APR) - The yearly percentage rate charged for carrying
your balance past the grace period. This rate is applied each month when
an outstanding balance is present. There are usually separate, higher
rates for balance transfers and cash advances than standard purchases.
- An APR that does not change throughout the year.
APR, Introductory Rate (or Intro APR) - A temporary, lower percentage rate that is usually raised to the regular APR after 6 to 12 months.
APR, Variable - Also known as a floating rate, a variable APR changes over the time with economic indicators, such as the Prime Rate (which can fluctuate daily). Most Business Credit Cards use a variable APR, consisting of the Prime Rate plus a standard interest rate.
Bad Credit - A term used to describe a poor credit rating that is typically gained by making late payments, skipping payments, exceeding card limits, or declaring bankruptcy. Entrepreneur's with "Bad Credit" are likely to be rejected in their online applications. They should first seek ways to improve their credit, before applying for a business credit card. Entrepreneur's with a poor credit rating may also be able to get a "secured credit card."
Balance Transfer - A balance transfer allows you to move an existing balance from one credit card over to a new credit card. Fees and APRs on balance transfers will vary from issuer to issuer. Balance transfer credit card offers are designed to help entrepreneurs consolidate their credit card debt onto one card, thus saving money on interest charges. Some credit card offers feature a low introductory 0% APR interest rate on balance transfers.
Balance Transfer Fee - A fee charged by a credit card company to transfer a balance from one card to another. This fee can be anywhere from 1%-5% of the balance. Many credit card companies do not charge this fee.
Bank Identification Number (BIN) - The first six digits of a Visa or MasterCard credit card account number used to identify the card-issuing institution.
Billing Cycle - The time between billing statements, usually 28-31 days.
Business Rewards Credit Cards - In a reward card, the more you use it, the more your rewards build up. Rewards credit cards allow you to earn airline miles or points towards dinners, hotels, etc.
Charge Card - Similar to a credit card except that the balance must be paid in full when the statement is received, usually at the end of the month. Charge cards do not allow carrying a balance, thus no APR is charged. These cards usually have an annual fee. American Express offers charge cards.
Card Issuer - A financial institution, bank, credit union, or company that issues plastic cards to cardholders.
Cardholder - An individual to whom a card is issued, or who is authorized to use an issued card.
Cash Advance - A cash loan from a credit card using an ATM or bank withdrawal.
Cash Back - Cash Back Business Cards allow you to get a small percentage of the money you spend back, usually monthly or quarterly. Although the amount is mall, if your business makes a lot of expensive purchases, the savings can really add up. This feature is particularly useful if you regularly pay your credit card bills on time. Most issuers also have a “network” of select companies from which you can get even larger cash back amounts.
Chargeback - A transaction returned by an issuer to an acquirer, because it was non-compliant with the association rules and regulations or because it was disputed by a cardholder.
Chargeback Period - The number of days from the transaction processing date, during which the issuer may initiate a chargeback.
Credit History - A profile of your financial history within a particular timeframe (usually years). It shows the extent to which you pay your bills on time and how much you may owe and to whom. Credit card issuers use this information as an important factor in either accepting or rejecting your application.
Credit Limit - The maximum amount of money can be charged to a credit card account during the month.
Default APR - A default APR can be applied in certain cases. Such cases might include failing to make payment so that it is received by the due date, paying less than the total amount due, or if you are in default already on another account. To be sure of what constitutes a default APR you should contact the card company themselves.
Finance Charge - Fees and other costs billed to you on your statement for using your credit card (e.g., cash advance fees, balance transfer fees, late fees, overlimit fees).
Floor Limit - An amount that MasterCard and Visa have established for single transactions at specific types of merchant outlets, above which authorization is required.
Grace Period (Free Period) - A period of time during which you are allowed to pay your credit card bill without being charged your APR against your balance and/or a late fee. This period is usually 10-28 days.
MasterCard Card - A card that bears the MasterCard symbol, issued by MasterCard International Inc. allowing the purchase of goods, services, or cash from a MasterCard merchant or acquirer.
Merchant Agreement - A written agreement between a merchant and a bank that contains rights, duties and warranties, with respect to acceptance of the bankcard and matters related to bankcard activity.
Merchant Bank - A bank that has a merchant agreement with a merchant to accept credit card transactions.
Minimum Payment - The lowest amount of money you are required to pay on your credit card statement each month.
Overlimit - A cardholder's account that has surpassed its credit limit with a transaction.
Overlimit Fee - A fee charged when your balance goes over your credit limit.
Per Transaction Fees - Fees paid by the merchant to the merchant bank or other contracted party on a per-transaction basis (usually 2% to 5% depending on the type of business).
Prepaid Debit Cards - A reloadable prepaid debit card allows you to only spend up to the amount you have pre-deposited into the account. This card is good for people with a bad credit rating or if you tend to overspend and would like to control your spending.
Primary Account Number (PAN) - The number embossed and/or encoded on the credit card that identifies the issuer and the cardholder account.
Prime Rate (or Prime Interest Rate) - The interest rate at which banks lend to their most creditworthy customers.
Processing Date - The date on which the transaction is processed by the acquiring bank.
Secured Credit Cards - A credit card that requires collateral property, such as a house, car, or deposit of money before approval. Secured credit cards are for people with no credit or poor credit and who are trying to build or rebuild their credit history.
Service Charge - A component of some finance charges, such as the fee for triggering an overdraft checking account into use.
Smart Card - A plastic card containing a computer chip with memory and CPU capabilities. Such a card may be used for identification or to store information, financial amounts or other forms of data. Also called an integrated circuit card or a chip card.
Transaction, Credit Card - An action between a cardholder and a merchant that results in activity on the cardholder's account.
Transaction Identifier - A unique 15-character value that VISA assigns to each transaction and returns to the acquirer in the authorization response. This value is used to maintain an audit trail throughout the lifecycle of the transaction and related transactions, such as reversals, adjustments, confirmations, and chargebacks.
Unsecured Credit Cards - Credit cards that are not secured by collateral, in which businesses qualify for such cards based on their credit history, financial strength, and earnings potential.
Visa Card - A card that bears the Visa symbol, from the Visa International Service Association and all of its subsidiaries and affiliates, and which enables the cardholder to obtain goods, services or cash from a Visa merchant or acquirer.