When you are issued a business card, you could be forgiven to think for a moment that you have “made it”. Let’s just forget about how to get one approved for yourself and assume that every lender is courting you with their rewards and freebies. How then do you choose which one to reserve a spot for in your wallet?
Interest rates. The most confusing item can be the interest rate. This is such an irony as how difficult can it be to tell someone that there will be $10 interest for every $100 owing. Well, you will be able to see the challenges for yourself when you factor in that there are 365 days a year and you do not use and repay credits in monthly blocks. The interest charges on a card can be expressed in many ways. It could be reducing rate, effective rate, flat rate, etc. Make sure you know what is the official type of rate you are signing up for. For your information, a gigantic effective rate can be made to look half it’s size when converted to a flat rate.
Fees and charges. There are bound to be terms regarding annual fees, checking fees, statement fees, etc. These can be tricky to the untrained eye. Especially in the form of term loans where even though the interest can be a mini 5%, the processing charges can set you back another 10% directly deducted from disbursement. Make sure you know what you are signing up for.
Perks. Issuers are coming up with all sorts of gimmicks to attract the type of clientele they want. So much so that it could feel like a buffet table. You have to weigh it up and determine which perks will benefit you the most. For example, if you do lot of fine dining, you might want to get a card with discounts and rewards for restaurants in town. If you do a lot of business traveling, get one with flyer miles so that you can fill up your account quickly. These things can add up pretty quickly.
Reporting. You surely want an easy system to review your transactions or the transactions of all cardholders. In these days of modern technology, you should fairly expect that issuers have comprehensive systems that allow you to conduct your reviews quickly via secured networks or applications.
Which one should I repay…
Flexibility. No 2 person will need the exact same features of a card. This is why issuers are starting to allow businesses the flexibility to customize credit levels or things like different levels of access. If your organization needs flexibility, be sure to get one that has it or it could negatively impact your productivity and available resources.
Acceptance. Needless to say, if the cardholders are world travellers, they should be carrying cards that are accepted globally like those of VISA and MasterCard. There are many other players in the market. But many are not accepted as widely. Imagine an employee facing an emergency overseas but the ATM does not accept the card that he is holding. Those are the type of ironies that will leave you sleepless at night.
Grace period. Do you know that there are some cards in the market that have no grace periods? I don’t know who are the smart people who conceptualize these products. I also don’t know which market segment the marketers are targeting specifically. But just bear in mind that you cannot assume that there will be a 25 day grace. It is also possible that the grace period was compromised due to some exotic perks which you had selected.
Online banking. So many people are so addicted to online banking that nobody can blame them for forgetting how a real bank looks like. Different banks can use different security standards for security. For example, some might just require a PIN via SMS to enter it’s gateway, while other might require a security token. If you don’t want the added burden of carrying a token around, get those that only require SMS and password. The other thing of concern is the interface. Some internet banking platforms are simple to navigate while others have horrendous user interfaces. If this is a point of concern to you as well, make sure to ask your correspondent to walkthrough their systems with you.
Relationship managers. Different organizations have different ways to run their business. Some banks appoint dedicated manager to business accounts while other do not. There are pros and cons for both scenarios. A dedicated relationship manager will be able to understand you needs more deeply but if you do not get along, it can be difficult to get someone else appointed. While having no one tagged to your account can make you feel left out, don’t forget that you are free to walk into any branch and demand attention instead of being referred back to your manager halfway across town.