6 Solid Tips for Veterans in Need of a Loan

Veterans are faced with some unique money challenges. Fortunately, there are ways for them to get an affordable loan.

U.S. military members transitioning out of service can find themselves facing many unique money challenges. After all, duty to one’s country can understandably push personal money management to the back burner. Fortunately, there are steps veterans can take to secure the funding they need to achieve their financial goals.

Here are some tips for veterans looking to secure a mortgage, small business loan or other types of financing.

1. Know What Federal Benefits Are Available …

There are programs out there designed to help veterans and their families overcome the various money challenges that can arise when a family member is on active duty. For instance, veterans are eligible for VA home loans, which often feature no down payment, no mortgage insurance and flexible underwriting requirements. And there are various grants, loans and business development programs backed by the U.S. Small Business Administration that can help former military members and budding entrepreneurs.

Veterans can get acquainted with the general benefits available to them on the Veterans Benefits Administration website. Prospective entrepreneurs can begin looking into business financing by checking out the Small Business Administration’s Office of Veterans Business Development online.

2. Research All of Your Options

That’s not to say veterans should limit themselves to federal loan programs. For instance, when it comes to mortgages, “to be sure, VA loans aren’t the right fit for every veteran,” Chris Birk, a Credit.com contributor and director of education for Veterans United, a VA loan lender, said. “Understanding all of your mortgage options is also key to getting the best deal possible. Even veterans with sterling credit and a 20% down payment would benefit from comparison shopping between conventional and VA loans.”

3. Consider Financial Institutions That Cater to Vets …

If you do decide to go for a VA loan to buy a home, consider finding a mortgage lender who knows the ins and outs of that type of financing.

“VA loan market share has soared over the last decade, but it’s still a niche product for many lenders and real estate professionals,” Birk said. “Working with companies and professionals who know the ins and outs of VA loans can help ensure veterans get the most from this benefit.”

Similarly, you can look into finding a credit card issuer or bank that caters to former and current military members. (We’ve got a list of some of the better military credit cards here to help you get you started on your search.)

And there are several startups, venture capitalist funds and, even, angel investors out there that offer small business financing exclusively to veterans and military members that may prove worthwhile, depending on your financial situation.

4. … But Be Sure to Assess Your Finances Holistically

We say “depending on your financial situation” because it’s important to consider factors beyond your status as a veteran when making money decisions. Take credit cards as an example. Ultimately, the right one for you will be influenced by your current financial situation or goals. For instance, if you’re trying to pay a lot of debt, you might want to look into a balance-transfer credit card. 

The same thing applies when exploring other financing opportunities — just because you’re a veteran doesn’t mean products designed for veterans are going to be the ones that best need your financing needs.

5. Watch Out for Scams

Due to the money challenges some veterans face (often related to spending extended periods of time out of the country or relocating frequently), they often find themselves on a scammer’s radar. That’s why it’s a good idea to vet any business you’re thinking of getting a loan from before filling out applications. You can start by conducting a thorough search online or checking a company’s status with the Better Business Bureau.

6. Brush Up Your Credit

A good credit score can make all types of financing more affordable, so it’s a good idea to see where you stand before applying for a loan. You can get a free credit report snapshot, along with two free credit scores, updated every 14 days, on Credit.com. You can also pull your free credit reports from each of the major consumer credit reporting agencies each year at AnnualCreditReport.com.  

If you need to build credit, you can look into credit-builder loans or secured credit cards, which help people with thin files establish a history of using credit wisely. If you need to improve your credit, you can focus on paying down high credit card balances, disputing credit report errors and limiting applications for new credit, all of which can hurt your credit score.

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7 Ways to Save at Home Depot

Want to do more around your house without spending a ton of money? Here's seven ways to lower your costs when shopping at Home Depot.

If you work in the home improvement field or love do-it-yourself projects, there’s a good chance you’ve spent some significant time and money at Home Depot, one of the country’s largest suppliers of home improvement merchandise. But enthusiastic Home Depot shoppers know that, even after hunting down great deals, the bill can quickly spiral out of control at the register.

Luckily, there are many tricks that can save you a lot at Home Depot. Here are seven ways you can cut costs on your next expedition. 

1. Discounted Gift Cards 

Websites like Cardpool.com and Raise.com provide discounted Home Depot gift cards that save you a percentage of the total gift card value. For instance, as of writing this, Raise.com had gift cards discounted with up to 5.1% off their total value. 

2. Hunt for Coupons & Deal Alerts

You can look out for Home Depot flyers and coupons in your mailbox or in the store, but you can also get alerted to special promotions, deals and offers by signing up for Home Depot’s email or text alerts. Signing up right now will also get you $5 off your next purchase of $50 or more. 

3. Work the Low-Price Guarantee 

Home Depot offers a low-price guarantee for both online and in-store purchases. For online purchases, Home Depot will match any competitor price, including the item price and shipping costs. For in-store purchases, Home Depot will beat competitor prices on identical items by 10%. You’ll have to bring the ad, printout or photo to the cash register when you check out. Several exclusions apply to this policy, including custom products, open-box merchandise and auction pricing. 

4. Rent Equipment 

For equipment you’ll only use once or twice, you might want to evaluate the cost of renting versus buying. Many items can be rented on an hourly, daily or weekly basis at a fraction of the cost. For instance, we found a $188 leaf blower that can be rented for $23 a day. If you only need to blow leaves once a year, this can be a much more cost-effective option. 

5. Visit the Clearance Section

Many Home Depot locations have clearance sections located throughout the store (although they can sometimes be hard to find). Check out the far reaches of the store for deeply discounted items. 

6. Consider a Home Depot Credit Card

Home Depot offers a credit card (we’ve got a full review here) to help their customers finance home improvement projects. Home Depot is currently offering an introductory 0% annual percentage rate (APR) for all purchases of $299 or more if you pay off your balance in six months. They also offer cardholders up to 24 months of interest-free financing for special categories such as roofing supplies or custom kitchen cabinets.

If you were already planning on charging your Home Depot purchases to a credit card, you could avoid interest by taking advantage of these offers (although you can also avoid interest by paying off your balance in full each month).

Remember, before applying for any credit card, it’s a good idea to check your credit scores to see where you stand. You can get your two free credit scores, updated every 14 days, right here on Credit.com.

7. Join the Garden Club 

Avid gardeners should take a look at the Home Depot Garden Club, an email and text alert club that delivers special garden promotions and offers right to your inbox or mobile device. Plus, Home Depot is currently offering $5 off your next purchase of $50 or more when you sign up.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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Review: PenFed Launches 1.5% – 2% Power Cash Rewards Credit Card

PenFed, a credit union that anyone can join (more on that later) has just introduced a new cash back rewards credit card. The card pays a high, flat cash back rate and brings a credit union approach to fees (low and not many of them) and simplicity. Here are the details on the cash back that you can earn:

  • Anyone with military service earns 2% cash back on all spending, with no limits or restrictions. That is the highest flat cash back rate in the market.
  • Anyone with a PenFed checking account (restrictions apply) earns 2% cash back on all spending, with no limits or restrictions. (If you keep $500 in the checking account, there is no fee and you earn 0.20% APY on the money).
  • If you do not have military service or a checking account, you can earn 1.5% unlimited cash back. At 1.5%, the card matches Chase Freedom Unlimited or Capital One Quicksilver, but it is still beat by Citibank’s Double Cash.
  • There is a minimum redemption amount of $5 for the cash back that you have earned.
  • There is a bonus offer: get $100 of cash if you spend $1,500 during the first 90 days.

In addition to the cash back, here are some additional features:

  • Chip with pin functionality: if you travel overseas, you might find chip + signature limiting. For example, trying to use a card with only signature functionality at kiosks across Europe (like the London Underground) can be challenging.
  • No annual fee and no foreign transaction fee.
  • Variable APR range of 9.24% – 17.99%. If you have excellent credit, the lowest APR at Citi (on the Double Cash product) is 13.49%. For people who revolve occasionally, this could be a better option. (Although our advice remains to pay your balance in full and on time. If you need to borrow money, personal loans and balance transfers remain cheaper options).

Our Verdict

Best Cash Back Credit Card for Military: 2% is the gold standard for a flat rate cash back credit card, and PenFed delivers for men and women who have served. This is better than any competing flat-rate cash back credit cards because of the lower APR and lack of foreign transaction fees.

Best Cash Back Credit Card for Spending Abroad: If you use Citi Double Cash, you would be hit with a foreign transaction fee of 3%. So, you would earn 2% but be forced to pay 3% in fees. Before this card, Capital One Quicksilver was our top choice because of a 1.5% earn rate and no foreign transaction fees. PenFed’s card now wins because (a) if you put $500 into a PenFed checking account you can earn 2% on this card, and (b) the card offers chip and pin functionality. If you spend $1,000 overseas this year, you would pay $10 to Citi, (2% cash back – 3% fees = -1%), would earn $15 with Capital One and would earn $20 with PenFed.

Tie: Best Flat-Rate Cash Back Credit Card: With both Citi Double Cash and PenFed you can earn up to 2%. Each card has its own unique differences, which is why they are tied for best flat-rate card in the market.

  • PenFed: You need to join the credit union, open a checking account and fund the account with $500 (or sign up for direct deposit) to ensure you get the full 2% and avoid fees. Financially it will make sense, but there are a number of obstacles to get the full rewards (unless you are military).
  • Citi Double Cash: It is easy to apply and get the card (no credit union membership or Citi checking account required). However, the card is actually 1% as you earn and 1% as you pay, so it takes longer to get the full 2%. The interest rates are higher and there is a foreign transaction fee.

There are still options to earn higher cash back rates in certain categories. You can find the best cash back credit cards by every category here. For example, you can earn 5% unlimited on gas with Fort Knox Credit Union or 6% (with limitations) on groceries at American Express.

If you want to learn more or apply, you can visit PenFed’s website.

LearnMore

Requirements To Earn 2%

Here are the details on how to ensure you get the full 2% earn rate:

Military: You are eligible to earn 2% if the primary or joint applicant is in military service, the National Guard, the Reserves, an honorary discharged veteran or retired from the United States military. Military members receive the 2% upon completion of the application – no further action is required.

Checking Account: If you do not meet the military requirements, you would need to open a checking account with PenFed. The account is called the “AccessAmerica Checking Account.” There are some decent benefits to the account (you can earn 0.20% APY interest on balances up to $20,000 and 0.50% APY on balances between $20,000 and $50,000). If you shift your monthly direct deposit of at least $500 to this account, you will not have a monthly fee. However, if you do not want to shift your direct deposit, you can deposit $500 and keep it there to meet the required minimum balance. This is actually the easiest way to earn the 2%, cash back rate and, given the 0.20% interest on the checking account, it can be financially worthwhile.

Join the Credit Union: There are multiple ways to join the credit union. If you are active or retired military, you are eligible to join for free. If you work for the US government or are a relative of a member, you can also join for free. But don’t worry if you are unable to meet those requirements. You might belong to an eligible organization (check here). You can also join an organization to become eligible for credit union membership. You can pay $17.00 (one time and non-refundable) to join Voices for America’s Troops or the National Military Family Association. By supporting a good cause, you become eligible for credit union membership. In addition to the credit card, PenFed is known for low rates on auto loans and mortgages.

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9 Essential Tax Tips for Entrepreneurs

For many entrepreneurs, there is no topic more fraught than taxes. In fact, a 2015 survey of small business owners found that 40% say dealing with bookkeeping and taxes is the worst part of owning a small business and that they spend 80+ hours a year dealing with taxes and working with their accountants. Taxes can be time-consuming, confusing, and a drain on your finances if you don’t prepare well. So whether you choose to do your taxes on your own or hire a professional, this guide can provide some sound advice and hopefully make tax time a little less taxing.

 

#1 Select the Right Entity for Your Business

 

One of the first decisions you’ll make when setting up your business is whether to function as a sole proprietor, partnership, LLC, or corporation. In her recent blog post, Wendy Connick, an IRS enrolled agent and owner of Connick Financial Solutions, says “the type of business entity you choose will have a huge effect both on how you pay taxes and how much tax you pay. It’s wise to consider the pros and cons of each business structure before making a final decision.”

Sole proprietorship

A sole proprietorship is the simplest way to form a business, as it is not a legal entity. The business owner just needs to register the business name with the state and secure the proper local business licenses. The downside is that the sole proprietor is personally liable for the business’s debts.

Partnership

A partnership is similar to a sole proprietorship, but two or more people share ownership. Both partners contribute their money, labor, or skill to the business and share in its profits and losses.

Limited liability company (LLC)

An LLC provides more protection from liability than a sole proprietor or partnership but with the efficiency and flexibility of a partnership.

Corporation

A corporation is more complicated and usually recommended for larger companies with multiple employees. It is a legal entity owned by shareholders, so the corporation itself, not its shareholders, is legally liable for business debts.

Unlike other business entities, corporations pay income tax on their profits, so they are subject to “double taxation,” first on company profits and again on shareholder dividends.

To avoid double taxation, corporations can file an election with the IRS to be treated as an S Corporation. S Corporation income and losses “pass through” to the shareholder’s personal income tax return instead of being taxed at the corporate level.

Some small businesses and freelancers may save on self-employment taxes by registering as an S Corporation and paying themselves a salary. Sole proprietors, partners, and LLC members pay self-employment tax on their entire business net income, but S Corp shareholders only pay self-employment taxes on their wages. They can receive additional income from the corporation as a distribution, which is taxed at a lower rate.

Connick says “many small business owners start out as sole proprietors and adopt a different structure once the business gets big enough to make it worthwhile (which would typically be when the business is making over $50,000 a year).”

 

#2 Get an Employer Identification Number

 

All businesses, even sole proprietors should get an Employer Identification Number (EIN). Technically, sole proprietors can use their Social Security number (SSN) as the business’s identification number, but that means providing an SSN to any clients or vendors who need to issue a 1099, a move that can leave you more exposed to identity theft.

Applying for an EIN from the IRS is free and can usually be done in a matter of minutes using the IRS’s online form.

#3 Make Sure Your Business Isn’t Just a Hobby

 

You know you’re in business to make money, but would the IRS agree? If your company is operating at a loss, the IRS could reclassify your business as a hobby, resulting in some serious tax consequences.

A business is allowed to offset taxable income with business expenses, but hobby expenses cannot be netted against hobby income. Instead, they are deducted as miscellaneous itemized deductions on Schedule A and limited to the amount of hobby income reported on Schedule C. This means a hobby business can never result in a net loss, and you may be prevented from deducting hobby expenses entirely if you don’t itemize deductions.

If you’ve been making money in your business for a while and just have one bad year, you don’t have to worry about the IRS reclassifying your business as a hobby. If you’ve been losing money for a while and especially if your business involves some element of personal pleasure or recreation (such as horse racing, filmmaking, or restoring old cars), you’ll want to make sure you’re treating your business like a business in case the IRS challenges your losses.

The IRS takes several factors into consideration:

  • Does the amount of time you put into the business suggest an intention of making a profit? Side projects are more likely to face scrutiny because you’re spending the majority of your time at another full-time job.
  • Do you depend on the income you receive from the business?
  • Were any losses beyond your control or occur in the startup phase? Losses due to poor management and overspending are less likely to hold up under examination.
  • Have you changed operation methods to improve profitability? Many business experience setbacks. If you learn from mistakes and try to correct your course, the IRS is more likely to agree that you have the intention of running a profitable business.
  • Do you have the knowledge and experience necessary to be successful in your field?

If you are concerned about an IRS challenge of your losses, there are a few steps you can take to treat your activity as a business:

  • Keep thorough business books and records.
  • Maintain separate business checking and credit accounts.
  • Obtain the proper business licenses, insurance, and certifications.
  • Develop and maintain a written business plan.
  • Document the hours spent working on your business, especially if it is a side project.

 

#4 Track Income and Expenses Carefully

 

Maintaining separate business checking and credit card accounts is not only a good way to demonstrate that your business is not a hobby, but it’s also an excellent way to simplify tracking business income and expenses.

Benjamin Sullivan, an IRS enrolled agent and a certified financial planner with Palisades Hudson Financial Group LLC in its Austin, Texas, office, says “small business owners can get a tax benefit from almost anything that is an ordinary and necessary business expense. Travel, meals, advertising, and insurance costs are just some of the popular deductions.”

Use small business bookkeeping software

Small business accounting software like FreshBooks, Xero, or QuickBooks Online can help you easily and quickly track your business revenues and expenses. They can usually be set up to import transactions from your business checking account automatically and let you snap pictures of receipts with your phone.

Whether you choose to use a software program or just a spreadsheet, establish a system for organizing records and receipts right from the beginning. “Little expenses can add up quite a bit over the course of a year,” Connick says, “but you can’t deduct them if you don’t know what they are.”

Special rules for travel, meals, and entertainment

It is especially crucial to maintain good records for business travel, meals, and entertainment expenses. The IRS allows taxpayers to deduct 100% of their business-related travel and 50% of the cost of business meals and entertainment expenses, whether you are taking a client out for a meal or traveling out of town. Because these categories are prone to abuse, the IRS requires documentation to substantiate that these expenses have a legitimate business purpose.

For meals and entertainment, in addition to a receipt that shows the amount, time, and place, taxpayers should also make a note of the individuals being entertained and the business purpose. Meeting this requirement can be as simple as jotting down a note on your receipt or in your calendar regarding who you dined with and the business matters discussed.

For travel expenses, hotel receipts must include a breakdown of the charges for lodging, meals, telephone, and other incidentals. Your hotel should be able to provide an itemized receipt at checkout.

Save cash instead of taxes

One trap that small business owners often fall into is spending money to save on taxes. At year end, many entrepreneurs look at business profits and think they need to spend their cash to avoid a big tax bill. Don’t spend a dollar to save forty cents in tax. If you truly need a new computer, extra supplies, or a new vehicle, buy it. Don’t spend money just to avoid a tax bill. Remember, taxes are a cost of doing business. If you’re paying taxes, you’re making money.

#5 Set Aside Money for Taxes

 

When you set up a separate business checking account, it’s also a good idea to set up a separate savings account to help you organize funds and set aside money for taxes.

Our tax system is a “pay as you go” system. When you receive a paycheck from an employer, money is regularly withheld on your behalf. When you are self-employed, making estimated tax payments is your responsibility. If you don’t pay in enough during the year to cover your income tax and self-employment tax, you may have to pay an underpayment penalty.

Estimated tax payments are due on the 15th day of April, June, September, and the following January. You have a few options for calculating what you owe each quarter:

Use Form 1040ES

This form includes a worksheet to help you estimate how much you owe for the current year. (Corporations use Form 1120-W to calculate estimated taxes.)

Look at last year’s return

If you’ve been in business for a while and there are no significant changes this year, you can aim to pay 100% of last year’s tax as a safe-harbor estimate (110% if your adjusted gross income for the prior year was more than $150,000).

Make a quarterly estimate

If your income fluctuates, you may prefer to make a quarterly calculation. Calculating estimated payments is complex. It depends on your tax bracket, deductions, credits, etc. In this case, it’s best to work with a tax professional who can consider all of the factors and recent changes in the tax law.

Sullivan says, “Tax planning isn’t a one-time exercise that should be done at the end of the year or at tax time. Instead, tax planning is an ongoing process of structuring your affairs in a tax-efficient manner.”

#6 Don’t Forget to Track Your Mileage

 

When you drive your personal vehicle for business, you have two options for deducting business automobile expenses: the standard mileage rate or actual expenses.

The IRS releases the standard mileage rate annually. The rate is $0.54 per mile for 2016. It goes down to $0.535 cents per mile for 2017. You simply multiply the standard mileage rate by the number of miles you drove for business during the year.

To use the actual expense method, total up all of the costs of operating your vehicle for the year, including insurance, repairs, oil, and gas, and multiply them by the percentage of business use. For example, if you drove 10,000 miles during the year and 5,000 of those miles were for business, your percentage of business use would be 50%. If it cost $7,000 to own and operate your vehicle, your deduction using the actual expense method would be $3,500 ($7,000 x 50%).

You can use whichever method gives you the largest deduction. However, if you want to use the standard mileage rate, you must choose it in the first year the car is used for business. In subsequent years, you can choose either method.

Whichever method you choose, you must track your business miles. You can do that with a paper log kept in your glove compartment or with an app such as MileIQ or TrackMyDrive. “Note that ‘business purpose’ is a pretty broad category,” Connick says. “If you drive to the supermarket and pick up some pens for your home office while buying groceries, the trip counts as business mileage.”

 

#7 Consider the Home Office Deduction

 

Some business owners avoid claiming the home office deduction, believing it to be an audit trigger. That may have been true in the past, but today’s technology has made home offices much more common. Connick suggests entrepreneurs shouldn’t fear the home office deduction if they meet the requirements. “It’s no longer audit bait,” she says, “especially if you use the safe harbor method to calculate your deduction.”

To take advantage of the home office deduction, you must use the area exclusively and regularly, either as your principal place of business or as a setting to meet with clients. The home office deduction is based on the percentage of your home used for the business. You can choose either the traditional method or the simplified method for deducting expenses.

Under the traditional method, you’ll calculate the percentage of your home that is used for business by dividing the square footage of your office by the square footage of your entire home. For example, if your home is 1,500 square feet and your office occupies 150 square feet, the business percentage is 10%. Then, you can deduct 10% of all of the expenses of owning and maintaining your home, including mortgage interest, real estate taxes, utilities, association dues, insurance, repairs, etc.

Under the simplified method, you’ll take a deduction of $5 per square foot, with a maximum of 300 square feet. So if your home office measures 150 square feet, the home office deduction would be $750 (150 x $5).

 

#8 Save for Retirement

 

For most self-employed people, the simplest option for retirement saving is an individual retirement account (IRA). Anyone can contribute to a traditional IRA, but with an annual contribution limit of just $5,500 ($6,500 if you are age 50 or older), you may want a retirement savings option that allows you to save more.

Connick says her number one tip for entrepreneurs is to open a SEP-IRA. “These retirement accounts are cheap to open and maintain,” she says. They also “have a high contribution limit, and contributions are fully tax deductible.” SEP-IRAs allow entrepreneurs to contribute up to 25% of their net earnings from self-employment, up to a maximum of $53,000 for 2016.

The deadline to contribute to a SEP-IRA is the due date of your return, including extensions. So 2016 contributions can be made until April 18, 2017, or October 15, 2017, if an extension is filed.

 

#9 Get Help from a Professional

 

Connick recommends that entrepreneurs hire a professional to do their taxes. “If you pick someone who knows their stuff,” she says, “you will likely save more than enough off your tax bill to pay for their fees. For that matter, tax preparation fees are deductible!”

When choosing a tax professional, look for someone with experience working with self-employed taxpayers. The IRS maintains an online directory of return preparers who have additional credentials, such as EAs, attorneys, and CPAs. Search the directory to find a professional near you with the credentials or qualifications you prefer.

If there is one thing all entrepreneurs can agree on, it’s that everybody dreads tax season. Having a basic understanding of tax law, maintaining organized records throughout the year, and working with a professional can help you make the most of this least wonderful time of the year.

The post 9 Essential Tax Tips for Entrepreneurs appeared first on MagnifyMoney.

The Best Credit Cards for Small Businesses

Note from the Editor: The information related to Chase Ink Business Preferred Card credit card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card.

 

As a small business owner you know you need to manage your cash flow and plan for financing. Credit cards can be an ideal way to meet those needs. But business owners need to be savvy cardholders. Small business credit cards come with unique risks that personally affect entrepreneurs.

 

In this roundup we cover the risks and advantages of small business credit cards. And we’ll show you what card fits your business needs.

 

Best Cards for Financing

If credit cards are an important source of financing and capital for your business, then you need to be a savvy borrower. Look for cards with compelling terms, and take the time to understand the fine print. Remember, the card may be in the business’s name, but you’re personally liable for the debt. Don’t take on more debt than you can handle.

Best 0% Financing

The American Express Blue for Business card offers 12 months of 0% APR for financing. If you fail to pay back your purchases within 12 months, your interest rate will move to 11.74%-19.74%, depending on creditworthiness. You lose access to the introductory rate if you make a late payment.

The 12-month 0% APR window is one of the most generous offers available. On top of generous financing, you earn rewards for spending.

Rewards include 10x points per $1 spent on the first $2,000 in qualifying purchases at U.S. restaurants for the first six months. You can also earn 10,000 membership rewards points after making your first purchase. Plus, you will receive 2x points on qualifying purchases on the first $50,000 in the first year. Every year, you’ll also receive a bonus of 30% of the previous year’s points earned.

The card offers perks including secondary car rental insurance, purchase protection, extended warranties, baggage insurance, trip accident insurance, and travel hotline help.

The Fine Print
  • Introductory rate: 0% APR financing for 12 months. You must pay on time, or you lose this rate.
  • APR: After 12 months, 11.74%-19.74%, depending on your creditworthiness
  • Penalty APR: 29.74%
  • Annual fee: No annual fee
  • Late fee: Up to $38
  • Returned payment fee: $38
  • Cash advance fee: Greater of $5 or 3%
  • Cash advance APR: 25.74%
  • Rewards: 2 points for every dollar you spend in the first year up to $50,000. 1 point per dollar spent. 10 points for every dollar you spend on dining in the first six months.
  • Bonus: 2 points for every dollar you spend booking travel at amextravel.com

Apply Now

Low Interest Rates

If you and your business have excellent credit, the Platinum Plus for Business MasterCard from Bank of America offers low ongoing financing. This is a great card for businesses with periodic short-term borrowing needs. Besides interest rates as low as 9.74%, it offers a seven-billing-cycle 0% APR promo rate and $200 statement credit if you spend $500 in the first 60 days.

Plus, the card offers travel accident insurance, secondary rental insurance, and automatic downloads to QuickBooks.

Remember, it’s not wise to use a small business credit card for long-term financing. Many credit unions will offer low rates on installment business loans.

The Fine Print
  • Introductory rate: 0% APR financing for seven billing cycles.
  • APR: 9.74%-20.74% variable APR, depending on your creditworthiness (after seven billing cycles)
  • Annual fee: No annual fee
  • Late fee: $19-$49 (depending on your balance)
  • Returned payment fee: $39
  • Cash advance fee: Greater of $10 or 4%
  • Cash advance APR: 24.74%
  • Sign-up bonus: $200 statement credit if you spend $500 in your first 60 days
  • Rewards: None

Apply Now

Cash Flow Management

Managing cash flow can be one of the most difficult problems facing small business owners. The Plum Card by American Express makes cash flow easier. The Plum Card is a charge card not a credit card. This means that it is designed to give you access to short-term working capital. However, it is not a good source of financing.

If you pay your bill within 10 days of statement closing, you’ll get a 1.5% discount on eligible charges. Otherwise you have a full 60 days without interest before you need to make a payment. Beware, these benefits come at a steep price. After one year, you’ll pay a $250 annual membership fee. Plus, carrying a balance on a charge card comes with huge penalties. The first time you go past due, you’ll be charged 1.5% of the balance. After that, they charge a late fee of 2.99%. The minimum fee is $38.

The Fine Print
  • Late fee: 1.5%, then 2.99%; minimum of $38
  • Returned payment: $38
  • On-time payment bonus: 1.5% discount if you pay balance within 10 days of statement closing
  • Annual fee: $0 for the first year, $250 thereafter
  • No cash advance
  • Rewards: None

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Imperfect Credit

If you’re struggling to get approved for a small business credit card, the Spark Classic from Capital One offers an excellent option. The card has a high variable APR (23.49%) and mediocre rewards (1% cash back). But Capital One will approve business owners with just average credit.

This isn’t a great card for borrowing, even in the short term. However, the Spark Classic will give you some working capital, and it will help your business build its credit. Just remember to pay your bill on time each month and to keep your credit use low.

The Spark Classic also offers perks like purchase protection, free extended warranties, and travel and emergency assistance. These protections offer tremendous value to business owners.

The Fine Print
  • APR: 23.49% variable APR
  • Annual fee: No annual fee
  • Late fee: Up to $39
  • Cash advance fee: Greater of $10 or 3%
  • Cash advance APR: 23.49%
  • Rewards: 1% cash back on all purchases

Apply Now

Cards for Service Members

Former and current members of any branch of the military can join Navy Federal Credit Union and apply for these high-quality credit cards. The Visa and MasterCard have the same fees and conditions, but they offer different perks.

 

Navy Federal Credit Union’s Visa for Business credit card gives former service members access to low interest rates and rewards spending. This can be an excellent choice for service members with excellent credit who may have to borrow for short-term needs.

The card gives access to the Visa SavingsEdge program, which gives up to 15% off business purchases at qualifying retailers. However, the card doesn’t offer extended warranties or other protections, so it isn’t always the best choice.

The Fine Print
  • APR: 9.65%-18.0%
  • Annual fee: No annual fee
  • Late fee: Up to $20
  • Returned payment fee: Up to $20
  • Cash advance fee: $0 at Navy Federal Credit Union branch ATM, 50 cents domestic, $1 foreign
  • Cash advance APR: APR + 2%
  • Rewards: 1 point per dollar spent

Apply Now

Navy Federal Credit Union’s MasterCard for Business credit card gives former service members access to low interest rates and rewards. The low interest rates make it a compelling choice for service members with short-term borrowing needs.

The card gives access to the MasterCard Easy Savings program, which gives automatic 10% rebates at a network of gas stations, auto repair shops, and shipping companies. This can lead to significant savings. The card also connects to the MasterCard Business Network, which makes expense reports easy. However, the card doesn’t offer extended warranties or other protections.

The Fine Print
  • APR: 9.65%-18.0%
  • Annual fee: No annual fee
  • Late fee: Up to $20
  • Returned payment fee: Up to $20
  • Cash advance fee: $0 at Navy Federal Credit Union branch ATM, 50 cents domestic, $1 foreign
  • Cash advance APR: APR + 2%
  • Rewards: 1 point per dollar spent

Apply Now

Best Cards for Rewards

Many small business credit cards offer compelling rewards to cardholders. These rewards can allow you to reinvest in your business, or you can take them for personal use. If you choose to use a rewards credit card, try to avoid paying interest. Most of these cards are not good choices for short-term borrowing.

Travel Perks

If you’re a frequent traveler, these small business credit cards give you access to incredible perks. But be sure to read the fine print. These cards have a few gotchas attached.

 

The American Express Business Platinum Card is a charge card with a premium price tag ($450 per year) and premium benefits for some users. Please note, it is not a credit card; you should not plan to borrow money with this card. These are the most significant perks:

  • Global Lounge Collection access
  • $200 airline fee credit (for checked bags, inflight refreshment, etc.)
  • One free Global Entry or TSA Pre? application fee (allows you to expedite security at select airports and U.S. Customs)
  • Free inflight Gogo Wi-Fi and Boingo (land-based Wi-Fi)
  • Secondary car rental insurance
  • Baggage insurance
  • Travel accident insurance (if you become injured or sick)
  • Purchase protection
  • Free extended warranties
  • 50% airline points redemption bonus on first- or business-class tickets (if you spend 100,000 points on a business-class ticket, you’ll get 50,000 points back 6-10 weeks later)
  • Starwood Preferred Guest Program and Fine Hotels and Resorts Program (perks like in-room WiFi, complimentary breakfast, and other hotel perks)
The Fine Print
  • Annual fee: $450
  • Late fee: 2.99% or $38, whichever is greater
  • Returned payment fee: $38
  • No cash advance
  • Sign-up bonus: Earn 50,000 Membership Rewards points after you spend $10,000 within three months of card membership. Earn 25,000 more points after spending an additional $10,000 within your first three months.
  • Rewards: 1 point per dollar spent
  • Bonus rewards: 1.5 points per dollar for first $5,000 spent in a year; 2 points per dollar spent through amextravel.com.

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As a business owner, little incidentals can add up in a big way. The Chase Ink Business Preferred Card mitigates these costs by providing high-value insurance protection to you and your employees. Not only will you earn rewards (outlined in the fine print), you’ll enjoy these perks, too.

Trip Cancellation/Trip Interruption Insurance
If your trip is canceled or cut short by sickness, severe weather, or other covered situations, you can be reimbursed up to $5,000 per trip for your pre-paid, non-refundable travel expenses, including passenger fares, tours, and hotels.

Trip Delay Reimbursement
If your common carrier travel is delayed more than 12 hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket.

Travel Accident Insurance
When you pay for your air, bus, train, or cruise transportation with your card, you are eligible to receive accidental death or dismemberment coverage of up to $500,000.

Auto Rental Collision Damage Waiver
Decline the rental company’s collision insurance and charge the entire rental cost to your card. Coverage is primary when renting for business purposes and provides reimbursement up to the actual cash value of the vehicle for theft and collision damage for most cars in the U.S. and abroad.

Baggage Delay Insurance
You are reimbursed for essential purchases like toiletries and clothing for baggage delays over six hours by passenger carrier up to $100 a day for five days.

Lost Luggage Reimbursement
If you or an immediate family member check or carry on luggage that is damaged or lost by the carrier, you’re covered up to $3,000 per passenger.

Extended Warranty Protection
This warranty extends the time period of the U.S. manufacturer’s warranty by an additional year on eligible warranties of three years or less.

Cellphone Protection
Get up to $600 per claim in cellphone protection against covered theft or damage for you and your employees listed on your monthly cellphone bill when you pay it with your Chase Ink Business Preferred Credit Card. There is a maximum of three claims in a 12-month period with a $100 deductible per claim.

The Fine Print
  • APR: 16.49%-21.49%
  • Annual fee: $95 per year
  • Late fee: $15-$39, depending on balance
  • Returned payment fee: $39
  • Cash advance fee: Greater of $15 or 5% of transaction
  • Cash advance APR: 25.49%
  • Sign-up bonus: 80,000 points when you spend $5,000 in the first three months
  • Rewards: 1 point per dollar spent, 3 points per dollar spent on travel, shipping purchases, internet, cable or phone services, or online advertising (social media or search engines)
  • Bonus: Points worth 25% more when you redeem through Chase Ultimate Rewards(Chase’s travel website)

Big Introductory Bonuses

Business owners who know they’ll spend a lot in a short period of time should take note of these cards. These bonuses provide excellent value if you can meet the spending requirements. But be wary: these cards have high interest rates. You won’t come out ahead if you end up financing a big purchase with these cards.

The Business Platinum Card offers excellent travel perks, but it offers an unparalleled sign-up bonus, too. Right now, you can earn 50,000 Membership Rewards points after you spend $10,000 within three months of card membership. You’ll also earn 25,000 more points after spending an additional $10,000 within your first three months.

If you plan to spend $20,000 or more in the next three months, this bonus is worth the highest value when redeemed for travel rewards. Depending on which option you choose, this bonus may offset annual fees. You need to churn through a lot of money to meet the spending minimums, but this is a lucrative bonus.

Click here to see details including perks and the fine print.

The Chase Ink Business Preferred Card offers ideal perks for frequent travelers, but right now you can get a great sign-up bonus, too. By spending $5,000 in three months, you’ll earn 80,000 points. This bonus is worth $1,000 if you spend your points through Chase Ultimate Rewards for travel.

In addition to the lucrative bonus, you can earn everyday spending rewards (including 3 points per dollar spent in certain categories) and valuable trip insurance.

Click here to see details including perks and the fine print.

Cash Back Rewards

Every business owner can benefit from more cash in their pocket. These cards give you the best cash back offers for everyday spending. You can find better rewards if you use multiple cards, but these have excellent rewards for those who don’t want to mess around with multiple cards. Plus, these cards have excellent protections, too. But be careful when you finance with these cards; they don’t offer great terms for borrowing.

 

The Spark Cash card from Capital One offers unlimited 2% cash back on all purchases, and it is free for the first year. Plus, if you spend more than $4,500 in the first three months of holding the card, you get a $500 cash bonus. After the first year, you’ll pay $59 to hold the card. After the first year, if you spent more than $3,000 per year, it’s worth it.

The Spark Cash card also offers valuable protective features like purchase protection, free extended warranties, primary auto rental collision coverage, and more. Overall, the Spark Cash card gives straightforward rewards to business owners with excellent credit.

The Fine Print
  • APR: 17.49% variable APR
  • Penalty APR: 29.9% (applied if you make a late payment)
  • Annual fee: Free for the first year, $59 per year afterward
  • Late fee: Up to $39
  • Cash advance fee: Greater of $10 or 3% of transaction
  • Cash advance APR: 23.49%
  • Sign-up bonus: $500 reward when you spend $4,500 in the first three months
  • Rewards: 2% cash back on all spending

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The Spark Cash Select card from Capital One offers a rare combination of friendly financing terms and rewards. You’ll earn an unlimited 1.5% cash back rewards on all purchases, and you’ll receive a $200 sign-up bonus if you spend $3,000 or more in your first three months.

On top of that, you’ll have a 0% APR financing rate for nine months, and an APR as low as 13.49% afterward.

This isn’t the most lucrative rewards card, but you won’t pay an annual fee. This makes it a great card for businesses that don’t spend as much on a credit card.

The Fine Print
  • Promo APR: 0% for nine months
  • APR: 13.49%-21.49%, depending on your creditworthiness
  • Penalty APR: 29.9% (applied if you make a late payment)
  • Annual fee: $0
  • Late fee: Up to $39
  • Cash advance fee: Greater of $10 or 3% of transaction
  • Cash advance APR: 23.49%
  • Sign-up bonus: $200 reward when you spend $3,000 in the first three months
  • Rewards: 1.5% cash back on all spending

Apply Now

Best Category Bonuses

If you and your employees spend a lot of money in a limited number of categories, you might want to consider a rewards card with heavy bonuses in those categories. These cards offer at least 3 points for every dollar you spend in a given category. That’s the equivalent of a 3% reward.

Remember, rewards cards aren’t usually a good choice for financing purchases. Look to pay off these cards every month.

Online Advertising

Businesses that regularly advertise on social media networks (Facebook, Twitter, etc.) or via search engines (Google, Bing) can earn impressive rewards on their marketing spending. These are the best cards for heavy online advertisers.

 

You’ll earn 3 points for every dollar you spend on online advertising. In addition, you’ll be eligible for travel perks, sign-up bonuses, and more.Click here to see details including perks and the fine print.

The American Express Business Gold Rewards Card allows you to choose to earn 3 points per dollar spent on any one of the following categories: advertising in select online media, airfare from airlines, gas, shipping, or computers and cloud services from select providers. You’ll earn 2 points per dollar on the categories you don’t choose.

All other spending earns 1 point per dollar you spend.

As a sign-up bonus, you’ll earn 50,000 points if you spend $5,000 or more in your first three months of holding the card. In addition to the rewards, you get trip accident insurance, extended warranties, and purchase protection.

Since the Business Gold Rewards Card is a charge card, you shouldn’t plan to borrow with the card. But the rewards for online advertisers are excellent. Just watch out for the $175 annual fee that kicks in after the first year.

The Fine Print
  • Annual fee: $0 for the first year, then $175
  • Late fee: 2.99% or $38, whichever is greater
  • Returned payment fee: $38
  • No cash advance
  • Sign-up bonus: Earn 50,000 Membership Rewards points after you spend $5,000 within three months of card membership
  • Rewards: 1 point per dollar spent
  • Bonus rewards: 3 points in one category (pick between advertising in select online media, airfare from airlines, gas, shipping, or computers and cloud services from select providers).
  • 2 points rewards on remaining four categories.

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Dining and Travel

Dining and travel cost a lot, but these cards offer enticing rewards. The cards we recommend offer more than 3% cash back on restaurant spending, travel, or both. Plus, they have other compelling perks. But most of these cards aren’t great for borrowing, so check the fine print.

 

The American Express Blue for Business card offers the single best dining deal, at least during your first six months. During the first six months of holding the American Express Blue for Business card, you’ll get 10 points for every dollar you spend at a restaurant up to $2,000. Once the six-month offer period is over, you may want to turn to other rewards programs from the cards we outline below.

This is also one rewards card that has a decent financing option. Right now you can get 0% APR financing for the first twelve months.

Learn more here about the perks, rewards, and fine print before you apply.

Looking to thin down your wallet? A Sam’s Club Business MasterCard, doubles as your membership card. But it’s not just for wholesale shopping. Spending on the Sam’s Club Business MasterCard gives you the opportunity to earn 3% cash back rewards on all restaurant spending worldwide. It also gives 5% cash back rewards on gas (except when purchased at other wholesalers) and 1% on all other spending.

Road warriors and frequent business entertainers will love this card. Plus, the $45 statement credit (if you spend $100 the day you open it) pays for your annual Sam’s Club membership.

The Fine Print
  • APR: 15.15%-23.15%
  • Penalty APR: 29.99% (applied if you make a late payment)
  • Annual fee: $0 (requires $45 Sam’s Club membership)
  • Late fee: Up to $39.99
  • Cash advance fee: Greater of $5 or 3% of transaction
  • Cash advance APR: 20.15%-26.15%
  • Sign-up bonus: $45 statement credit when you spend $100 on your first day (applying in-store makes this easy).
  • Rewards: 1% cash back on all spending. Maximum of $5,000 back in a given year.
  • Bonus rewards: 3% on dining and travel expenses. 5% on gas (up to $6,000 in gas purchases). Gas cannot be purchased from other wholesale clubs.

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If you prefer Costco to Sam’s Club, the Costco Anywhere Visa Business Card offers similar terms. Their 4-3-2-1 program includes 4% on gas purchases (up to $7,000 per year), 3% cash rewards for all dining and travel expenses, 2% on Costco purchases, and 1% on all other spending.

While the rewards are sweet, the terms can be expensive. This is not a good card for borrowing, so be sure to pay it off each month.

The Fine Print
  • APR: 0% for seven months, then 15.74%
  • Penalty APR: 29.99% (applied if you make a late payment)
  • Annual fee: $0 (requires $55 Costco membership)
  • Late fee: Up to $37
  • Returned payment fee: Up to $37
  • Cash advance fee: Greater of $10 or 5% of transaction
  • Cash advance APR: 22.49%
  • Rewards: 1% cash back on all spending.
  • Bonus rewards: 4% on gas (up to $7,000 in gas purchases). Gas cannot be purchased from other wholesale clubs. 3% on dining and travel expenses. 2% rewards on all purchases from Costco and Costco.com.

Apply Now

If you’re a frequent business traveller, Chase Ink offers the best rewards. You earn 3 points for every dollar you spend on travel, but you get a travel bonus. Every point is worth 1.25 points when you book through Chase Ultimate Rewards.

Travel perks also include trip insurance, auto rental collision damage waivers (this is primary coverage), and more.

Click here to see details including perks and the fine print.

Gas

 

As a small business owner, you know that driving can be an economical choice, but you can also earn rewards for all those miles on the road. Sam’s Club Business MasterCard gives 5% cash back rewards on gas (except when purchased at other wholesalers), and 1% on all other spending.

Even if you don’t frequent Sam’s Club, this is the best category for rewards for gas purchases.

Click here to see details including perks and the fine print.

Learn More

Risks of Using Small Business Credit Cards

Many business owners see credit cards as an easy solution to their capital needs. But small business credit cards have unique risks. Savvy entrepreneurs will consider the risks before opening a new line of credit. These are the most important considerations.

 

1. Personal Liability

As a small business owner, you’re personally liable for credit card debt. Business bankruptcy won’t protect you. Whether your business succeeds or fails, you have to pay back the debt.

The only way to get rid of small business credit card debt is to declare personal bankruptcy. Bankruptcy destroys your credit history for a few years, and it stays on your report for 7-10 years.

Don’t treat a credit card like venture capital. It’s not. You need to repay it.

2. Credit Bureau Reporting

Small business cards don’t report to the credit bureaus the same way personal cards do. Depending on which card you choose, if you pay your credit card on time, you may not see any information on your personal report. For most business owners, that is a good thing. It will keep your personal credit utilization low.

However, an unpaid bill will show up on your personal credit report. A bill that goes unpaid for 60 days will generally appear on your personal credit report. Some banks offer more generous reporting and some less. You can speak with a banker to determine your bank’s reporting standards. Still, your personal credit score can take a hit at the same time that your business credit runs afoul.

When you take out a business credit card, put precautions in place to protect yourself. You can limit employee spending, and remove authorized users. You can also set up automatic payments each month.

3. Not Protected by the Credit CARD Act

In 2009, Congress passed the Credit CARD Act. The act curtailed predatory lending behaviors, including raising interest rates on existing balances. It also required credit cards to be more transparent about rates and fees.

This act does not apply to business credit cards. With a small business card, banks can raise the interest rate on your existing balance at any time. A higher interest rate means a bigger minimum payment and a longer time to pay off your debt. If you’re using your small business credit card to finance something, you could be at risk.

Still, many banks will not raise your rate if you have an excellent history of on-time payments. It is simply a risk to understand.

Another risk related to the Credit CARD Act is the possibility of double-cycle billing. Business credit cards do not require an interest accrual grace period. This means you may begin accruing interest on purchases right away. We only recommend cards that have a grace period of at least 23 days built in. If you choose a different card, be sure to check for this in the rates and fees schedule.

4. Employee Risk

Small business credit cards make it easy to watch employee spending. Still, they pose serious risks. You’re personally liable for any employee spending on a credit card. If you wouldn’t trust an employee with your wallet, don’t trust them with a company card. Employees can rack up debt and leave the company. That leaves you with a bill and no recourse to get the money back.

The Best Ways Use Small Business Credit Cards

Once you understand the risks of small business credit cards, you can also understand their best uses. Over 65% of small businesses use credit cards on a regular basis. Some use them for rewards, and some for financing. In fact, close to 10% of all small business financing comes from credit cards.

Here are some of the best ways to use a small business credit card.

 

1. Earning Rewards and Protection

If you pay your small business credit card in full each month, you can earn substantial rewards. Many business credit cards offer perks, including cash back, travel rewards, extended warranties, trip insurance, and more. As a business owner, you can reinvest the rewards into your business or take them for personal use.

2. Managing Cash Flow

Cash flow problems destroy small businesses, but credit cards provide short-term working capital. If you have a sales cycle that lasts 30 days or less, a credit card can fund inventory purchases. By the time your bill comes due, you’ll have money to pay it off. If you follow this practice, you’ll pay no interest, and you’ll manage your cash flow.

Credit cards can simplify employee monitoring, too. Most business credit cards allow you to place individual restrictions on employee use. That means you can limit how much and where employees can use company cards. But your employees may manage to misuse the cards. If they do, you will be stuck with the bill.

3. Building Business Credit

Businesses have credit reports just like people. Business credit cards can help you build your score. To build your business credit, hold the card under your employer identification number (EIN).

When your EIN establishes a record of paying its bills on time, it makes your business creditworthy. That means you’ll have an easier time finding long-term loans at great rates.

63% of all small businesses carry debt. Having a lower interest rate on that debt could make the difference between success and failure. This means every small business should take their credit history seriously from the outset. Small business credit cards may allow you to build that history without paying interest or fees.

4. Short-Term Borrowing

Small business credit cards have high interest rates, but they can work for short-term borrowing. If you know that you’ll only carry debt for a few months, you may want to finance something with a credit card.

Credit cards do not have origination fees or prepayment penalties. Sometimes this means that they offer the best terms for short-term borrowing. Just be careful when you borrow, and pay it back quickly. High interest debt compounds over time.

If possible, borrow on a card with a 0% introductory offer. Remember, failing to pay off 0% interest purchases may result in back interest. Be sure you understand the risks before you borrow.

The Worst Ways to Use Small Business Credit Cards

Small business credit cards aren’t always the best tool to get the job done. These are a few times when you should avoid using credit cards.

 

1. Personal Expenses

Bad accounting sinks many entrepreneurs. Always keep your personal spending off of your business credit cards. This will simplify bookkeeping, and it will keep your business credit utilization low. If you need to borrow for personal expenses, look for a low-interest credit card instead.

2. Long-Term Financing

Due to the high interest rates, most businesses should not finance long-term commitments using credit cards. Instead, consider an installment loan from a local credit union or a bank.

Applying for an installment loan can be a pain, but the lower interest rate will be worth it in the long run. Keep money in your pocket and avoid small business credit cards for long-term financing.

3. Cash Advances

Cash advances are the most expensive way to use a credit card. Banks begin charging interest right away, and the advance has a higher interest rate. Cash advances also have high fees of up to 10% of the amount you withdraw.

If you need cash, withdraw it from your business checking account instead, or take out a traditional loan.

4. Financing a Failing Business

Do not use credit cards to help a failing business limp along. Too many people will not give up on their idea even when the execution doesn’t work out. Credit card debt will bury a failing company and erode your personal wealth.

Remember, negative credit behavior will show up on your personal credit report. Plus, courts hold you liable for all credit card debt your business incurs. Use an objective lens to decide whether you need to shut down your business.

The post The Best Credit Cards for Small Businesses appeared first on MagnifyMoney.

The 20 Most Dangerous Places to Cross the Street

There's a reason your mom always told you to look both ways before you cross the street — maybe even more so in these 20 places.

Image: tepic

The post The 20 Most Dangerous Places to Cross the Street appeared first on Credit.com.

The Credit Card That Can Help You Save for Retirement

If you’re serious about long-term savings — whether for your retirement, your child’s college fund or both — you already know you need to do more than just save your pennies. You need dollars, and lots of them.

So, what if you could put a percentage of every purchase you make on your credit card into one of those investment funds? Would you do it? If your answer is yes, you may want to take a look at the Fidelity Rewards Visa Signature card from Fidelity Investments, because that’s exactly what this credit card does.

What Is the Fidelity Rewards Visa Signature Card?

The Fidelity Rewards card offers cardholders a very straightforward 2% back on all purchases, simple as that. Your reward is then deposited directly into a Fidelity account. For every $2,500 spent, a deposit of $50 is made into the investment account of your choice, and you can choose from a variety of accounts that meet your savings goals. Want your money deposited directly for retirement? Fidelity can put your 2% right into a traditional, Roth, rollover or SEP IRA. (Not sure what an IRA is? No worries: We have a full explainer on individual retirement accounts right here.) You can’t deposit directly into a 401K, however.

Prefer a brokerage account? No problem. For certain cardholders, there’s also the option of depositing your rewards into a 529 college savings account.

Of course, you can choose to spend your rewards instead of investing them, but the redemption value is lower if you choose to redeem your points for other rewards. The exact redemption rate varies, depending on how you cash in, a Fidelity spokesperson said. For instance, if you redeem rewards for retailer gift cards, the rate is .5% (10,000 points for $50 gift card).

No Spending Categories & No Limits

Not only does the Fidelity Rewards card making saving easy, there are no special spending categories and no limits or caps on the amount of rewards you can earn. Plus, the card’s variable 14.99% annual percentage rate means carrying a small balance every now and then won’t necessarily wipe out the rewards you earn. (Friendly reminder: It’s still important when using a rewards credit card to try your very best not to.)

New cardholders can get a $100 bonus after spending $1,000 in the first 90 days, but the funds must be deposited directly into a qualified Fidelity account. Qualifying accounts for both the regular rewards savings and signup bonus include:

  • Fidelity Cash Management Account
  • Fidelity-managed 529 College Savings plan
  • Retirement account
  • Fidelity Go account 

The Fidelity Rewards card also comes with all the benefits provided through the Visa Signature platform, including:

  • Auto rental collision coverage. Rent your automobile with your Fidelity Rewards card and you can waive the rental agency’s collision coverage.
  • Emergency assistance while traveling. Find the help you need when you’re on the road.
  • Purchase protection. Extra coverage for the things you buy with your card, including reimbursement for damage or theft.
  • Warranty manager service. This service helps you keep track of the warranties on the items you purchase with your card.
  • Lost luggage reimbursement. This service covers lost or stolen baggage.
  • Travel accident insurance. This coverage will help if you’re injured while traveling.
  • Roadside dispatch. Need a tow? Locked yourself out of your car? This pay-per-use service offers many benefits, including emergency roadside assistance.
  • Visa Signature Concierge. Access to 24-hour complimentary assistance with everything from booking travel to getting concert tickets.

Is the Fidelity Rewards Visa Signature Card Right for You?

Even if you like the idea of of a card with no annual fee that lets you earn 2% on every purchase you make and then directly invests that money toward your savings goals, the Fidelity Rewards card isn’t for everyone. Here are a few things to keep in mind as you weigh your decision:

  1. Do you have a Fidelity investment account? If you don’t, you’ll want to keep in mind that you can’t use your rewards as a deposit to establish a new Fidelity account. Rewards can only be deposited into existing accounts.
  2. Do you have excellent credit? To qualify for the Fidelity Rewards card, you’re going to need excellent credit. If you don’t know what your credit score is, you can get your two free credit scores, updated every 14 days, right here on Credit.com using our free credit report snapshot. It provides personalized details on how you can improve your scores, including a timeline of how long it will take to do so, across five key areas affecting your credit scores. It also provides you with a personalized list of some of the credit cards you would qualify for.
  3. Do you prefer investing over perks or cash back? If you travel a lot, whether for work or play, you might prefer some of the benefits that travel rewards cards offer, like free upgrades, free hotel stays, waived baggage fees and other non-monetary perks. Likewise, if you’d like more flexibility in what your rewards can be used for, a cash-back rewards card might be better for you.
  4. Can you get higher rewards with another card? If you want more flexibility than the automated investing inherent with the Fidelity Rewards card allows, there are cards that offer higher rewards (for example, the American Express Blue Cash Preferred gives a whopping 6% cash back on up to $6,000 in purchases per year at U.S. supermarkets), so the automated investing aspect should be particularly important to you.

Remember, whenever you’re shopping for a rewards card, it can really pay to keep your spending habits and rewards goals in mind as you compare cards. To get started, you can check out our list of the best cash back credit cards. And, no matter what type of plastic you’re on the hunt for, you can reference our expert guide to getting the best terms you possibly can on a credit card.

At publishing time, the American Express Blue Cash Preferred credit card is offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved or otherwise endorsed by the issuer(s).

 

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

Image: Bliznetsov

 

The post The Credit Card That Can Help You Save for Retirement appeared first on Credit.com.

2017 Started With Fewer Homes in Foreclosure

Good news: The U.S. residential foreclosure rate fell 12.94% in January from the same time in 2016.

Image: jhorrocks 

The post 2017 Started With Fewer Homes in Foreclosure appeared first on Credit.com.

Walmart Credit Card and Walmart MasterCard Review

If you are a regular shopper of Walmart, you’ve probably also seen their ads plastered in the store for the Walmart Credit Card.

Walmart offers two types of credit cards: the Walmart MasterCard offered by Synchrony Bank, which can be used wherever MasterCard credit cards are accepted; and the Walmart Credit Card, which can only be used at Walmart stores, Walmart Supercenters, Walmart Neighborhood Markets, Walmart.com, Walmart and Murphy USA gas stations, and Sam’s Clubs.

For heavy Walmart shoppers who can pay their balance in full each month, either card’s rewards might be sweet enough to justify signing up. Neither has an annual fee, and you’ll earn cash back in Walmart stores (3%). The regular Walmart Credit Card, however, can be especially appealing to those with low or fair credit scores who have trouble getting approved for other credit cards. In that case, the Walmart credit card can be a useful way to build credit, so long as you spend carefully and pay your bill in full each month.

But before you apply for a Walmart MasterCard or Walmart Credit Card, there are a few things you should be aware of as the Walmart Credit Card may not necessarily be the best choice for your spending habits.

Promotional Offers and Rewards

Dangling a sign-up bonus is a clever way to entice shoppers to sign up for the credit card at checkout. But given how high retail credit card interest rates can be, it’s never a good idea to sign up for a card because of the sign-up reward alone. The Walmart MasterCard and Walmart Credit Card are not exceptions. Unless you’re able to use and pay off your card in full each month, the cards’ painfully high interest rates (we’ll get to that later in this review) can easily eat away at any tangible cash back or sign-up bonus offers.

Walmart offers different promotional offers for cardholders and new accounts throughout the year.

Weak Sign-up Bonus

Currently, Walmart is offering a one-time 10% discount on purchases if you are a new cardholder. Before you get too excited, there’s a caveat: it’s only good on purchases up to $250 because there’s a $25 limit on the discount. It may also be confusing to new cardholders as it says “10% discount,” but you don’t actually get a discount at the register. Instead, it’s applied later as a statement credit.

To take advantage of this discount, you must make a purchase on the same day you are approved for your new credit card. The discount cannot be used for cash advances, gift cards, money orders, or gas purchases.

If you don’t receive immediate approval at a kiosk or online at Walmart.com, but are later approved after the company does more research into your credit history, you will receive a 10% certificate in the mail with your new credit card package. This offer is valid until April 30, 2017.

3-2-1 Save Rewards Program

The 3-2-1 Save Rewards Program allows you to save 3% on Walmart.com purchases, 2% at Murphy USA and Walmart gas stations, and 1% at Walmart and anywhere your card is accepted if you are Walmart MasterCard holder.

If you’re a heavy Walmart shopper, their 3-2-1 rewards program might be just tantalizing enough to justify signing up for their credit cards. There really isn’t another credit card on the market that can get you a 3% return at Walmart; however, there are certainly other cash back credit cards for people who shop at a range of supermarkets looking for a wider range of benefits.

The American Express Blue Cash Everyday Card, for example, has no annual fee and gets you 3% cash back at all supermarkets. However, if you do your grocery shopping at a store like Walmart or Target that is not specifically a stand-alone supermarket, you will only early 1% cash back. You also get 2% back on gas and 1% on everything else. So if you’re not a heavy Walmart shopper, the Blue Cash Everyday Card may be a better idea.

Walmart Credit Card and Walmart MasterCard holders are automatically enrolled in Walmart’s 3-2-1 Save Rewards Program. Walmart Business and Community accounts are not eligible.

You are eligible to earn these rewards as long as your account is open and in good standing, and there are no limits on the rewards that can be earned. Rewards never expire, and you can check your balance by logging in to your account here.

These savings are paid as a statement credit each month on net purchases after adjusting for any possible returns. Cash advances, quick cash advances, fees, and interest do not qualify for these savings rewards. Unfortunately, these benefits also cannot be stacked with the 10% discount for the first purchase for new cardholders.

The Fine Print

The Walmart Credit Card and Walmart MasterCard do not have an annual fee. However, the interest rate on the Walmart Credit Card is where it gets scary. The current APR is 23.15% based on the prime rate plus 19.65% and is subject to change as the prime rate fluctuates. The Walmart MasterCard interest rates range from 17.15% to 23.15%, depending on your creditworthiness.

You can avoid paying interest on your charges by paying your entire balance in full every month. Your due date will be at least 23 days after the close of each billing cycle.

Other fees are fairly standard. Late payment fees are up to $37. There is a foreign transaction fee of 3% on the Walmart MasterCard, which means you definitely don’t want to rely on this card overseas. Cash advances for the same card cost $5 or 3%, whichever is greater. The interest rate for cash advances ranges from 20.15% to 26.15%.

Applying for the Walmart Credit Card

You can apply for a Walmart Credit Card or Walmart MasterCard at any Walmart store register or jewelry kiosk, or online at Walmart.com. When you choose to apply, Synchrony Bank will pull your credit score and look at other factors, like your income level, debt level, employment, and more.

Applying for the Walmart Credit Card is pretty simple, and most of the time you can get an instant answer. But like any other credit card application, applying for a new card does require a hard pull on your credit, which will ding your credit score.

There is no preset credit score requirement listed to qualify. But many cardholders report qualifying for this credit card with a low credit score. The high interest rate is also an indicator that those who are working to build credit may qualify.

Applying in-store and being approved means you will receive a Temporary Shopping Pass that is only good for 24 hours in that particular Walmart store location.

Pros and Cons

Pro: There’s no annual fee to worry about.

Con: A high interest rate. Carrying a balance on your account will quickly outweigh the savings benefits of this credit card.

Pro: No cap on regular rewards. You can earn as many rewards as you want for your purchases.

Con: Rewards cannot be stacked with other offers, like the 10% discount for new cardholders.

Pro: Those with low credit may be able to qualify and use this card for everyday purchases to help improve their credit score.

Con: Because there are so many stores and so many items, having a Walmart Credit Card could be a nasty temptation if you don’t have a handle on your finances.

Other Rewards Cards

The Walmart Credit Card limits you to purchases only at Walmart stores, Walmart Supercenters, Walmart Neighborhood Markets, Walmart.com, Walmart and Murphy USA gas stations, and Sam’s Clubs. This is why store cards may not be the best choice if you are looking to earn rewards. But even if you qualify for the Walmart MasterCard so you can use it to save on purchases at locations other than Walmart, there are still better rewards credit cards available.

Citi Double Cash – With the Citi Double Cash card, you’ll earn 1% cash back on purchases, just like the Walmart MasterCard. But with this card, you’ll get another 1% cash back when you pay off your credit card statement. Plus, the Citi Double Cash card has no annual fee. But, you can use this card to earn rewards at superstores and warehouse stores like Walmart and Target.

Discover it – The Discover it credit card gives 1% cash back, but you can also earn 5% cash back in revolving categories each quarter, up to $1,500 of purchases. For the first quarter of 2017, the categories are gas stations, ground transportation, and wholesale clubs. The second quarter of 2017 includes home improvement stores and wholesale clubs. Also, Discover it matches all of your cash back, dollar for dollar, at the end of the first year.

American Express Blue Cash Everyday Card: The American Express Blue Cash Everyday Card, for example, has no annual fee and gets you 3% cash back at all supermarkets. However, if you do your grocery shopping at a store like Walmart or Target that is not specifically a stand-alone supermarket, you will only early 1% cash back. You also get 2% back on gas and 1% on everything else. If you’re not a heavy Walmart shopper, the Blue Cash Everyday Card may be a better idea.

Who Will Benefit Most from the Walmart Credit Card?

While store cards are not usually a good idea for staying on budget, the Walmart Credit Card can be used for things like groceries and household necessities. The card may also be good for someone who is looking to rebuild their credit and can’t qualify for other credit cards as the required credit score to qualify for a Walmart Credit Card is typically low, although a specific score needed is not stated on their website.

On the other hand, it’s worth being cautious if you decide to apply for the Walmart Credit Card. With its high interest rate, carrying a balance will do more harm than good.

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