The printer should have a list of specifications to work to in terms of bleed, etc., but if not, I'd work to 5mm bleed, 5mm safe area inside the edge (or 0.25" in American). So your proposed changes sound fine.
300dpi is standard print quality for stuff like business cards, so up your resolution to that.
Find out also what file formats they prefer - PSD, JPG, TIF etc - different printers prefer different formats. We prefer to send everything as a print-ready PDF, with all fonts converted to outlines.
HTH,
Pete.
I'm sure this is a totally duh question..
I've made business cards before and this has never been an issue, chalking it up to never having any formal training and being totally clueless evidently. I made a bunch of business card templates for a lady, asked her what size she wanted them, she said 3.75x2.25 so I made them, everything was great, sent them to be printed, the printer came back, said they weren't high enough resolution (I made them at 200 they want them at 300) and that they didn't have a bleed.. so I have the psd files, should I just change the resolution, then change the image size of the business card to 3.5x2 then the canvas size by .25x.25 then adjust the image accordingly or is there a better way???