From the April 1999 issue of Startups

What does a business credit card mean to your company? That you run a legitimate business, of course. It's a crazy paradox: Put cash on the table to pay for a business lunch and you've laid down real money, but the classier move is to deftly toss a gold card on top of the bill.

But good impressions aren't all business credit cards deliver. CPAs insist putting business charges on plastic helps you later, when you need to sort out tax-deductible expenses. Then, too, it's whispered that the IRS much prefers seeing this sort of orderly accounting whenever it does an audit. Another plus: A business credit card gives you a "float" between the time of purchase and the day when you've got to ante up the cash--usually there's at least a three-week gap, but sometimes you'll enjoy six or more weeks of interest-free use of somebody else's money. And in a cash-flow pinch, of course, you can pay off your balances over time--meaning credit lets you buy that computer today, when you need it, even if the company till is currently empty.

Spend too much, too fast, however, and you'll be hit with huge interest charges--which can jeopardize both your business and your personal creditworthiness. The bottom line: Business credit cards are terrific tools--if you use them shrewdly.

Read on for pointers on where to get--and how to use--business credit cards.

Get It Fast

Today, you can use a single, online application to apply for a variety of cards when you visit Quicken Business CashFinder (http://www.cashfinder.com). Lenders include American Express and a number of banks offering Visa and MasterCard. Applying for business credit doesn't get any easier, and CashFinder is free.

Debit Instead Of Credit

Can't qualify for a business credit card because your company is too young or your finances too shaky? Then get a debit card. It looks just like a credit card (complete with a MasterCard or Visa logo and your business's name) and makes the same good impression. The only hitch: Charges are immediately deducted from your checking account. For more details and links to banks that offer debit cards, visit:

Square One

Striking out when applying for credit cards? A good way to create a business credit history is to start by using a store credit card. Build up a solid history there, and you'll persuade other lenders to pony up the plastic. The two biggest national office supply chains offer cards; call (800) 767-1291 to get an application from Staples, or try Office Depot at (561) 278-4800 or http://www.officedepot.com.

Bedtime Reading

Smart entrepreneurs do their research before making heavy use of credit cards. There are plenty of articles available for free on the Web to get you thinking:

  • Shop: The Card You Pick Can Save You Money. Get this valuable white paper on credit cards from the U.S. Federal Reserve Board (http://www.bog.frb.fed.us/pubs/shop).
  • Applying for Business Credit? Know Your Rights. Read a fast summary of borrower's rights--including how to find out why a bank denied your application--from the Better Business Bureau (http://www.bbb.org/library/credit.html).

Money Talks

Interest rates vary from single-digit amounts to more than 20 percent annually--and that can make for a difference of hundreds of dollars a year. Want to know if you're getting the best deals? Before taking on a new credit card (or to measure how your current cards stack up), check out BankRate Monitor (http://www.bankrate.com), an independent firm that specializes in analyzing the terms offered by the nation's banks.