Since business credit cards are unsecured loans, they tend to carry much higher ongoing interest rates than secured loans (rates generally range from 13% to 25%, depending on your credit score), so keep this in mind if you plan on carrying a balance on the card each month. If youre trying to grow your business, a credit card is usually not the right way to go, because theres always going to be a balance on it and typically, rates are a lot higher than what a bank line of credit would be, says Mark W. Holtz, a commercial lender at the Bank of Ann Arbor in Michigan. Most business credit cards come with variable rates, which means the amount of interest you pay on the card balance can rise or fall, depending on the prime rate used in the banking system. So if interest rates were to increase, your payments could also increase. However, some banks may be able to offer you a fixed-rate credit card option, says Michelle Dunn, an author and expert on credit and collections. It doesnt hurt to ask, she says.
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