Though business travel has been experiencing a downswing over the past few months, sometimes a small business owner just can't afford to pass up on a business trip. For cash-strapped companies, trying to fit essential business travel into the budget can be a real challenge- especially when their domestic currency is weak and the currency markets abroad are volatile.
One simple (yet not so well-known) tip to make your business travel a little less complicated and keep the costs down is to get a good international credit card to use for your overseas business expenses.
If You're a Small Businesses in a Global Market, You'll Need More Than a Bank
Though business travel has been experiencing a downswing over the past few months, sometimes a small business owner just can't afford to pass up on a business trip. For cash-strapped companies, trying to fit essential business travel into the budget can be a real challenge- especially when their domestic currency is weak and the currency markets abroad are volatile. One simple (yet not so well-known) tip to make your business travel a little less complicated and keep the costs down is to get a good international credit card to use for your overseas business expenses.
If You're a Small Businesses in a Global Market, You'll Need More Than a Bank
As more businesses enter well-known emerging global markets and free zones, such as those in the United Arab Emirates (UAE), many of the biggest players in the business banking industry have followed suit with extensive international banking services that they promote with flashy ads and a dizzying array of services complete with big, important sounding titles. But while the services may be impressive, a closer look at the terms and conditions typically reveals that they are primarily meant for their big corporate clients- or at least those businesses that are extremely well-funded.
Where does that leave the cash-strapped small company?
The truth is that relying your bank and your regular credit cards for international payments and cash management can be a very expensive proposition. This is especially true when it comes to foreign transaction fees and trying to get the best currency exchange rates.
The majority of banks and credit card accounts will charge you an international transaction fee of 2% to 3% of the purchase amount. This applies even if you are physically in your home country but make a purchase with a company that processes the payment abroad. Thus, if you make any airline and hotel reservations through a company located in another country you may be charged an international transaction fee up to 3% of the price even if you are making these reservations from your home office. This may seem like small change, but it can really add up after a while. Moreover, banks and those money changing places you can find in airports and train terminals are notorious for offering poor currency conversion rates.
How International Credit Cards Can Save You Money
While common wisdom has it that regular credit cards tend to offer a better exchange rate than the banks and money changers, savvy frugal business travelers will try to secure the best, most suitable international credit card that they can. An international credit card is basically a regular credit card that will work outside of your home country.
There are many different kinds of international credit cards out there. Some offer cash back rewards, airline miles, or other redeemable points. These are good for business travelers who can quickly pay off their balances when they come home. Other international credit cards may just offer really low interest rates for those who need more time to cover their travel expenses. There are cards that require you to spend a certain amount each month before you earn rewards, whereas other cards may charge you an annual fee but offer other valuable benefits, such as travel insurance. Thus, choosing which card to get will really depend on how you plan on using it.
At any rate, if you are a money-conscious small business owner who needs to travel in foreign markets, you should make sure you include a good international credit card as part of your business travel tools.