Easy Guide to Business Credit Cards

Easy Guide to Business Credit Cards

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Easy Guide to Business Credit Cards

What are Business Credit Cards?

Business Credit Cards are specific to recipients undertaking business endeavors and commercial practices. Upon the respective approval of Business Credit Cards, the terms and conditions applicable to the credit cards will typically vary in accordance to the credit history and credit score associated with the individual business. The analysis undertaken by the lending credit institution will determine applicable credit limits, interest, and Annual Percentage Rates (APR).

The nature of businesses eligible for Business Credit Cards, in addition to the type of Business Credit Cards, will vary in accordance with a wide range of classifications associated with that business. In order to provide this determination, credit institutions will consider the debt to profit ratio, revenue, history, and credit history belonging to the business.

Types of Business Credit Cards

In most cases, the following two classifications of Business Credit Cards are applicable upon their respective approval for individual, commercial applicants:

Unsecured Business Credit Cards

Unsecured Business Credit Cards are synonymous with the traditional definition of a credit cards, which is identified as a method of credit that lacks intrinsic ties or reliance on preexisting monetary savings. The notion of unsecured Business Credit Cards allows for the recipient to undergo the spending, exchange, and transfer of monies with regard to the eventual and implicit repayment of an outstanding balance. Unsecured Business Credit Cards may be classified as a type of loan.

Secured Business Credit Cards

Secured Business Credit Cards may require the presence of ‘surety’ formulated with the addition of a third party in addition to borrower and the lender. Surety is defined as a third-party entity responsible for the ultimate repayment of the credit card balance. In certain cases, a surety may also be defined as a ‘guarantor’. In the event of the Principal’s failure to repay the credit card balance, the responsibility of repayment will become that of the Surety. Surety loans allow for heightened insurance with regard to the lender with regard to the reduction of the risk of failure to satisfy outstanding credit card balances. 

Credit Score Analysis with regard to the Application for Business Credit Cards

Business and Commercial endeavors ranging from established corporations to start-up businesses are eligible to receive Business Credit Cards. However, the risk of default, financial analysis, and earnings associated with a business will be critical in establishing the terms of credit limits, APR, and scheduled repayment intrinsic within Business Credit Cards.

Business Credit Cards Legality

Business Credit Cards will typically fall under the jurisdictions of both Finance Law and Commercial Law.

Finance Law is the legal specialty regulating and overseeing legislation applicable to the exchange and the circulation of monies. This takes place in both transfer activity undertaken involving hard currency, as well as Business Credit Cards.

Commercial Law is the legal field that enacts the regulatory oversight of standards and practices occurring within the commercial marketplace. With regard to Business Credit Cards, statutory legislation undertaken within the precepts of Commercial Law ensures that any nature of predatory lending or financial exploitation is determined to be an illegal offense. Amongst the many types of legislation applicable to Commercial Law, the Fair Billing Credit Act provides consumer relief from billing procedures considered to be exploitative and deceptive.


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