While a small business credit card can be beneficial in many ways, there are also many risks involved with it. Here are some things to keep in the forefront of your mind before moving forward with one.
- You are personally liable when you apply for a small credit card, not your small business. This is because, if the business happens to fail, you will be liable for any outstanding debts on the card.
- There are not many CARD Act protections available on small business cards. Mostly the protections pertain to risk-based repricing.
- If you add employees to the company card account, you are liable for them. This can be a blessing and a curse because you have to make sure to keep employees in check with their spending.
- Interest rates aren’t low on these accounts.
Image via Money Crashers.
