Credit Cards

Although credit cards are not a financing device exclusive to commercial banks, they are often a part of a bank's lending portfolio. A revolving credit charge card can used by a business as an alternative to a working line of credit.

The competitive banking environment has forced many institutions to seek new sources of income and develop new financial products that meet changing demands. One of the less publicized developments has been the growth of the small business credit card. The largest card issuers -- VISA International, American Express, and MasterCard International -- have adopted small business card programs. As a source for working capital, revolving credit cards offer a hassle-free, quick source for limited funds. However, their convenience is costly. The cards typically offer an interest rate slightly less than the rate on individual consumer cards and have lending limits that average just over $15,000.

To make the cards more attractive to prospective users, the lenders generally package credit along with additional features such as discounts for rental cars, hotels, and gas; travel insurance; warranty extensions on purchases; and a variety of different types of insurance. You should be prepared to present both a personal and business credit history when applying for the cards.