Non-traditional credit card companies and banks are becoming more popular throughout Canada, and their services are compelling to small business owners for a number of reasons. If you are considering getting a credit card from a non-traditional institution, you should be aware of the unique advantages offered by these cards.

No Brick-and-Mortar Locations

Brick-and-mortar locations were once the norm for all financial institutions, but non-traditional companies such as President’s Choice and Tangerine are changing that. These businesses don’t have physical branches where customers can make deposits or payments. Instead, they focus on online services, automatic teller machines, and customer support over the phone. This ultimately saves these companies money, which they pass on to their clients in the form of low rates and generous rewards programs.

No Annual Fees

While there are differences across the industry, many non-traditional credit card providers do not charge annual fees, and in some cases, they also offer free banking. For example, President’s Choice offers free daily chequing in addition to its no-annual-fee credit cards. In contrast, many traditional credit card providers and banks charge monthly or annual fees for these services.

Rewards Programs

Many non-traditional credit cards offer rewards points. For example, Tangerine offers 1% cashback on all purchases, but it also has a long list of categories eligible for 2% cashback. Monthly, these funds can be applied to your credit card balance or put in a savings account. Over time these rewards can add up. For example, if you spend $2,000 and earn 2%, you receive $40.

Low Monthly Payments

Generally, credit card payments are a nominal amount, such as $10 per month, and in other cases, they are a percentage of your balance. In either case, credit card payments tend to be lower than payments on installment loans, and this is true whether you select a traditional or non-traditional credit card provider. In some cases, you may prefer the relatively low payments associated with a credit card instead of the larger payments you may face with a business installment loan.

Easy to Track Expenses

A non-traditional credit card can also help you track your business expenses. Ideally, you should only use the card for business. Then, instead of having to sift through piles of paper or pull information from multiple accounts, you can simply look at your card statement and use that information. If you like, you don’t even have a paper statement mailed to you. Instead, you can do everything online and save copies of your monthly statements to the cloud or on your computer.

Emergency Back-Up

In addition to all of the other advantages of non-traditional credit cards, they can also help if an emergency pops up. If your clients fail to pay invoices on time, or if revenues are slow for any reason, you may turn to your credit card to cover utilities, office supplies or other expenses. When you use credit for your business, you may be able to write off the interest as a business expense.

References & Resources

• pcfinancial.ca
• fcac-acfc.gc.ca