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Common Fees Related to Business Credit Cards


Business credit cards often have fees that are not present in personal credit card agreements. Use of the cards, therefore, is more expensive. However, as most of the expenses are deductible, credit card use is still advisable because it permits keeping track of your business expenses and a dispute process for overcharges. Below is an explanation of a few of the common charges associated with business credit cards.

Application Fees

Although rare, if you are applying for a credit card in the company's name, you may have to submit an application fee for processing. These fees range anywhere from $20.00 to $75.00, and cover the expenses of running the business's credit reports and other background information. Sometimes, you may be able to negotiate a reduction of this cost or that, after approval, and the amount will be credited to the card.

Annual Fees

While only a few personal credit cards have annual fees, the majority of business credit cards have annual fees. The amount of these fees can be preset, but are typically based on the credit limit on the card, the size of the company and the amount of transactions and processing the credit company can expect to handle. The larger the company or the more transactions expected to be put on the card, the higher the annual fee that will be charged. Additionally, in situations of very low interest rates, the annual fee can be higher.

Late Fees

A company failing to make payments by the due date will be charged a fee on the credit card. This fee changes depending on the credit company and the amount of time the payment has been overdue, meaning that it may increase each month if the payment is still not made. Typically, these fees can be quite high. On a business credit card, they're even higher because non-payment may indicate a company's cash flow problems, causing the credit company to worry that the business is failing. If you have missed only one payment and it has been no more than a week, you may be able to negotiate this fee being waived.

Over-limit Fees

Charging more than the amount of available credit on your card also results in the credit company assessing a fee. Because they have to pay the merchant more money than they agreed to back you for, the credit company will charge you a fee to cover the cost of them not being able to send that money to another merchant. It is difficult, but not impossible to go over the limit on your credit card. Most times the card will be declined if there are not enough available funds to cover a purchase, but several purchases made at the same time and not during normal banking hours may go through at the same time (pushing you over the limit). Unfortunately, it is nearly impossible to have these fees subsequently waived. If you find that you are consistently being declined for lack of funds, consider reducing the balance by making a large payment or requesting a balance increase.

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