Business credit cards are relatively easy to get (especially when compared to trying to secure a business loan from your local bank) and can be an excellent way to finance a new or existing small to medium sized business. There are many competing business credit card offers around these days, and all that competition means that you end up getting the best business credit card deal. There are also many other benefits of getting a business credit card; we've compiled a comprehensive list below:

• Competitive Interest Rates: Many of today's business credit cards offer interest rates that rival or even top the best small business loans offers from the banks. This can mean long term savings on major purchases made with a business credit card.
  
  
• Balance Transfers: Many of today's business credit cards are offering fantastic balance transfer offers which can save you lots of money. Not having to pay any interest charges on balances transferred to your business card for a set, predetermined period of time (usually 3 to 18 months) can go a long way towards improving your business's bottom line.
  
  
• Added Security: From a personal perspective, I like being able to make all the online purchases I want without having to worry about hackers getting a hold of critical information (like my name and address) that can be used to steal my identity. Identity theft is rampant in the United States and worldwide so any added security is more than welcome.
  
  
• Travel Accident Insurance: Most business credit cards will include a travel insurance feature at no extra charge.
  
  
• Additional Cards: You can order additional credit cards that you can give to your employees.
  
  
• Track Spending: The vast majority of business credit cards will send you reports itemizing your spending. This is great for staying organized and for staying on top of tax deductible items.
  
  
• Save Money: you can save money by using your business credit card because most banks charge fees for writing business checks.
  
  
• Build Your Business's Credit Rating: Another great reason for getting a business credit card for your business: it builds a credit history for your business. Just as spending money using your personal credit card builds your personal credit history, the same is true of business credit cards. Your business has a credit rating and credit history just like you do, and your business's credit rating will greatly impact your business's ability to secure financing from banks and other lending institutions.
  
  
• Prestige: The prestige factor of business credit cards should not be discounted.
  
  Taking a potential business client out for dinner is always a good idea. I can recall -- on more than one occasion -- when a potential client of mine has commented, "nice" or "cool" after catching a glimpse of my business name on my business credit card. A business credit card sends a clear message to potential clients: it's let's them know that you are serious about your business and not just another unemployed dilettante doing "consulting" work.

With business credit cards, other benefits may include extended warranty protection on the hard goods you purchase (like computers), discounts on hotel rooms and rental cars and other great business related discounts.

The only real downside of business credit cards is that, like personal credit cards, you can easily get carried away with your spending and end up with a mountain of debt. Think of the spending you do with a business credit card as cash; every time you charge goods or services on your card, think of it as spending cash for those goods and services. That will help to keep your business spending in perspective and help keep your business debt at a manageable level.

Remember to keep your eye on where the U.S. Prime Rate is headed (The Prime Rate is the base or foundation rate for the vast majority of variable-rate business credit cards.) Depending on whether the Fed is tightening or easing, you may be able to time your credit card application so as to take advantage of the interest rate environment. If rates are on their way down, you may be able to save money in the long term by applying sooner rather than later. If rates are on their way up, you may want to hold off on applying for credit, since interest rates won't be in your favor for some time. If you are 100% confident that you'll be able to pay your balance in full each and every month, then the interest rate environment doesn't matter, since you won't be paying any interest.

Paying an Annual Fee

Sometimes, paying an annual fee is OK. It may seem counterintuitive to pay an annual fee for a business credit or charge card, especially because most contemporary business credit cards being offered by reputable banks don't require an annual tribute. But if a card's rewards program is exceptionally cardholder-friendly, and you plan on taking full advantage of the card's rewards program, then paying an annual fee is often worth it. The perfect example of this is a business charge card with an annual fee of $60, but with an air miles rewards program which, if you're a frequent flier, can earn you a substantial amount of free travel. If you are not likely to take advantage of a card's rewards program, then you should choose a business card that's doesn't charge an annual fee (you are likely to get a decent rewards program anyway.)

Go For An Unsecured Business Credit Card First!

As a business owner or entrepreneur just starting out, getting financing may be difficult, especially when credit market conditions are tight, as they are right now. You may think that your only option is to apply for a secured business credit card account. Don't. As long as your personal and business credit histories don't have any serious negative items on them, you should try for an unsecured business credit card before applying for a secured account.

Here's how a typical secured business credit card account works: you supply the bank with collateral in the form of cash. Your credit limit is set to whatever your collateral deposit is, so if you deposit $10,000, your business credit line will be $10,000. The bank may or may not pay you interest on your deposit, and the only time you'll be able to access the collateral deposit is if and when you close the account.

An unsecured business credit card, on the other hand, works like a consumer credit card in that the bank does not require any collateral. The bank sets your credit limit based on your income, your personal and business credit history, and other factors like current credit market conditions. If you default, the bank will do its best to ruin your personal and business credit ratings, but it won't have any right to take your house, car or any other personal asset.

Initially, with an unsecured business credit card account, the assigned credit limit may be small. Don't let this discourage you. You'll need to be patient and build your company's credit rating by paying all your business-related bills on time. After about two years, you'll probably get an automatic credit line increase. If you don't, ask for one. If you don't get one, or if you aren't happy with the one your bank has given you, then apply for a new, unsecured business credit card account at another bank. If you decide to apply for 2 or 3 more cards, that's fine too, just remember to spread out your applications so that you don't appear desperate for funds; apply every 6 months or so. Spreading out applications will also keep your company's credit rating healthy.

If you apply for one or more unsecured business credit card accounts, and your applications are rejected, you can always apply for a secured card as a backup plan. Only in one or two very limited circumstances will an application for a secured business card be rejected, like if you've recently declared bankruptcy.

If you're looking to get access to $100,000 or more, then you'll need to apply for an old fashioned business loan or a business line of credit. Be prepared to offer some sort of collateral, or to accept a lien on your business and/or personal assets.

American Express offers unsecured business credit lines from $10,000 to $100,000. The business credit lines offered by American Express are very attractive because the application process is simple -- as easy as a credit card application -- and American Express is a highly reputable, global brand.

Once the credit rating of your business has been well established, obtaining financing will become much easier. Moreover, once your business has aged and is trusted by banks and other creditors, most lenders will only require a check of your business credit rating when you apply for credit, as opposed to checking both your personal and company ratings. It may take 10 years to build a superlative business credit rating, but it's worth the wait.

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