When used astutely, credit cards can be a useful means of accessing money when you need it, particularly for business owners. You can use your card to take advantage for a quick cash injection if you need business supplies or services, credit card companies can also provide savvy business owners with many more benefits.
Bear in mind that not all credit cards are created equal, before you decide which business credit card you want to apply for, you might want to check out credit card reviews so you can make comparisons.
Credit Card Benefits for Business Owners
Business credit cards have a number of advantages as well as providing fast access to cash. These include:
Separating expenses: If you are running a small business, a separate credit card will make it easy to record business and personal transactions independently, which makes things much easier when it’s time to file your taxes. It will also help you keep track of your monthly business expenditure.
Monitoring Employee Expenses: Some credit cards allow company owners to set a limit on how much their employees are allowed to spend or where and when they can make purchases.
Increased spending limits: Business credit cards will often set higher spending limits than personal credit cards, allowing you a more flexible business budget.
Business card rewards: Personal credit cards offer all kinds of rewards these days, from air miles to cash back. Business credit cards also offer incentives including: reduced-cost business solutions, discounted office supplies and free travel. Some cards also offer cash back on office supplies, or phone and internet services.
Customized credit cards: Business credit card plans can be geared specifically towards business owners who do not have a steady monthly income. For example, you may have a significant income during one month, and little the next. Some credit card companies have programs designed just for this, allowing cardholders a discount if they pay early, or an extra time period to pay interest.
What to Watch Out For
Unfortunately, there is a downside to business credit cards because they are not covered by the Credit CARD Act of 2009. This loophole allows credit card issuers to engage in practices that are not legal within the personal credit card arena, such as double-cycle billing and retroactive interest rate increases.
When you apply for a business credit card, lenders will check your personal payment history as well as that of the business. This is how they will determine your interest rate and credit limit. If you want to increase your chances of eligibility, establish a credible reputation for your company, maintain a high credit score, and apply for a business credit card account that is right for your enterprise. Even if you don’t care much about the incentives, you could still be missing out on better deals by not signing up for a business credit card. Check out your options today to find out which card is right for you.
Alice Mann is an accountant for small to medium businesses. She enjoys helping business owners to succeed and shares some tips around the web on managing business finances.