Tips Guides Resources

Credit cards have become one of the world’s necessary evils. While credit card debt is increasing to record levels, business consultancy services no longer advise that credit cards be eliminated from a company’s cash management strategy.

If your business wants to access the cost savings that purchasing over the internet can provide; needs to maintain cash flow and supplies while waiting for creditor payments; or needs to give employees access to company funds for purchases, a small business credit card is the ideal solution. Here we examine what features and benefits a financial services advisor recommends for different types of businesses.

Financial consultancies in Hong Kong recommend that you ignore low introductory offers when you are looking for a business credit card. They often have higher fees and charges, as well as interest rates, when the introductory period has ended.

The cost and disruption to the business involved in changing credit cards time and again means that introductory offers are less worthwhile than more conservative, long term credit card offers. Business consultancy services also recommend that you read the small print of any credit card contract.

Trusting company representatives have sometimes run into trouble when they have found something unexpected in a credit card contract.
While it helps to read the fine print yourself, it is doubly useful to have another pair of eyes from your office go over the contract also.

The most fail-safe way you have to make sure that the terms and conditions of a credit card do not conflict with your business needs is to have a financial services representative from a business consultancy go over the contract for you. The initial cost may save you thousands in the longer term.

Look out for the special bonuses companies sometimes offer, say financial services experts in Hong Kong. Some card companies partner with office-specific firms to offer you savings on shipping, stationery, or computer related costs.

If you have a specific area of your business that consistently adds more to your bills than others, it is worth finding out if there is a credit card option that can help.

Some of the differences between personal credit cards and business credit cards, that Hong Kong financial services will advise you of, include the fact that debts are incurred in the name of the company, rather than in any specific person’s name.

This means that anything an employee spends on a credit card which he is authorized to use, is the legal responsibility of the company to pay for.

However, check with your business consultancy service about placing restrictions on what can be paid for with credit cards. You may be able to limit purchases to business items like fuel for vehicles and office supplies, or impose a spending limit.

Also ask your financial services advisor whether a charge card or a credit card is best for your business. Charge cards generally require the balance to be paid in full at the end of the invoicing period, while credit cards allow a business to maintain a debt balance, but then charge interest on the unpaid portion.

The Zetland Financial Group provides the offshore investor with fiduciary Services, investment management and corporate advisory services, offering personal service and professional advice with total confidentiality.