How a Rewards Card Can Help Your Small Business Through Hard Times

Types of Small Business Rewards Credit Card Relief Being Offered

Many small businesses operate on thin margins, and may have a harder time sustaining themselves for an extended period of time when business takes a downturn. They may not be able to get out of certain fixed expenses to lessen their own financial burden quickly, either. As a result, some credit card issuers offer their business customers options for financial relief until they can resume their normal payments on time.

Almost all of these relief measures are extended to business owners on a case-by-case basis, and you'll need to request this help directly from your bank. Do not just assume you can skip a payment and take advantage of these offers. If you think you will have issues paying your balance as agreed, call your financial institution as soon as possible. You might discover that they are offering some of the following courtesies.

1. Waived minimum payments: Most credit cards require you to pay a minimum amount each month based on your interest rate and current balance. Although larger credit card payments help to minimize your interest charges, paying the minimum amount will at least keep your account in good standing and prevent delinquencies. Carrying a high balance can hurt your business credit score over time, but its impact won't be nearly as much as missing a payment would be. For the moment, your bank may allow you to skip making even the minimum payment for a few months if you request it. If you're granted this financial relief, it may help you get your finances in order and keep your business open.
2. Waived late fees: When you are unable to pay even the minimum amount required before your statement due date, a credit card issuer typically charges you a late fee. For the time being, several major credit card issuers in the U.S. will consider waiving these fees for small business credit card holders who need the help.
3. Waived interest: Under certain circumstances, your bank may also waive the interest on your balance for up to three months until you can begin paying it off. This is a useful tool for immediate relief, but don't count on this for too long since your bank will eventually resume interest charges.
4. Deferred payments: Certain issuers allow cardholders to enroll for deferred payments for up to three months. You might not be deemed eligible, but it is an option that may be worth pursuing. Just note that you will eventually have to pay off your balances in full (including the deferred amount), so this is not a way of getting out of paying for good.
5. Lower interest rates and minimum payments: If you can't get your bank to waive your interest altogether, you might have success negotiating a lower interest rate if you temporarily need to carry a balance. You might also be able to negotiate a lower minimum payment simply by asking, as well. If these options would help you, call your bank and ask what choices are available to you and how many months you can expect them to remain in place.
   If you take advantage of any of these options, be prepared to accept certain conditions from your bank in return. Your issuer might let you stop paying your credit card temporarily or lower the interest rate on your balances, but it also might require you to stop using your card until you begin making payments again, or freeze your linked rewards points account. Be sure you understand the conditions of any aid you are requesting before you accept the help.

Ongoing Benefits for Small Business Credit Cards

In addition to those coronavirus-related efforts, many business credit cards also offer customers perks to help them maximize their spending and earning. Here are some of the most important to be aware of.

1. Welcome bonuses: If you recently applied for a business credit card, or are using this time as a chance to launch your own new enterprise and need a business credit card to help you do so, it pays to take advantage of the introductory offers currently available. What's more, some issuers are allowing folks who recently applied for certain credit cards six months rather than the usual three to meet the spending requirements for earning a welcome offer.
2. 0% Intro APR offers: Like some consumer credit cards, certain small business credit cards offer new members 0% APR (annual percentage rate) interest on purchases and balance transfers for a limited period of time. Not paying interest on balances for a year can be a savvy way to leverage your credit, but remember you will eventually have to pay off your balance. If you carry your balance past the end of your 0% APR intro period, you'll start incurring much higher interest rates.
3. Category bonuses: Many rewards credit cards, both business and personal, earn extra points or miles on a variety of purchases. If you are still buying things for your business, make sure you're using a card that earns you multiple rewards points per dollar spent.

Why You Should Use Your Business Credit Card

If you need to make large purchases for work, using your business credit card is also a good way to separate your professional expenses from your personal ones. It also helps to prevent your business credit from affecting your personal credit report. One factor that determines your personal credit score is how much of your overall line of credit you are using, and driving up your personal balances to cover business expenses can quickly make a difference in your scores. Payment history, including whether you make late payments, is another significant factor.

Using your business credit line for purchases can usually keep these factors from affecting your personal credit report. But keep in mind that you can still be held personally responsible for paying off your business credit cards, so this is not an excuse to spend irresponsibly or rack up a lot of credit card debt without severe consequences.