Everything You Need to Know About Business Credit Cards

Many small companies rely heavily on some form of debt, and much of their funds come from loans, lines of credit or credit cards. If you own a business, having a reliable plastic friend in your pocket can make the difference when managing transactions or when you require a quick source of capital. A designated business credit card can help build your company credit while protecting your personal one. It can provide a safe cash flow cushion if your clients delay their payments, so your purchasing power is never reduced. It’s a smart choice that might offer plenty of opportunities to grow your business.Many small companies rely heavily on some form of debt, and much of their funds come from loans, lines of credit or credit cards.







If you own a business, having a reliable plastic friend in your pocket can make the difference when managing transactions or when you require a quick source of capital. A designated business credit card can help build your company credit while protecting your personal one. It can provide a safe cash flow cushion if your clients delay their payments, so your purchasing power is never reduced. It’s a smart choice that might offer plenty of opportunities to grow your business.However, with so many options available, choosing the right one that matches the unique needs of your business can be complicated. Here is a quick guide to help you familiarize with this complex landscape and the many features of the different business credit cards.

1. Keep your business credit card account separated from your personal credit card. Your needs as a business owner can be very different from your consumer needs, so maintaining a separate business credit card account is usually the best choice. A dedicated business card can help you manage your finances with specific software and tools, such as apps to upload the receipt from a purchase instantly. Corporate cards can also set individual spending limits for individual accounts if you share them with other users, and track usage and expenses. There’s no need to explain how helpful this could be during a tax audit. Designated credit cards will also help you separate your business credit from your personal credit, saving you from being liable for any debt incurred on the business card.

2. Take full advantage of your reward programs Most business credit cards usually offer better sign-up bonuses and reward programs than personal credit cards. These programs often come in the form of points earned for equipment purchases, internet services or advertising expenses. They can be increased by shopping with featured partners, so always choose a card that offers you a bonus to buy what you usually need. Rewards typically include hotel, car rental and flight discounts, decreased shipping rates or percent-based cash-back on purchases. Bonuses can sometimes be extended to your personal accounts, while the points earned can be even racked up faster with employee credit cards.

3. Credit cards can be used as loans Applying for a small business loan can be annoying sometimes. You need to file some paperwork (a lot of paperwork for SBA loans), wait for your bank to verify your credit score, and maybe end up with nothing if the lender finds you do not qualify. If you find yourself in a bad spot, a business credit card can provide you with some much needed money quickly, especially if there’s no preset spending limit. This flexibility can really make the difference when you have no time to wait for a bank or the SBA. You’re free to borrow as much as you want each month without risking your assets since no collateral is needed.Be careful though!

Overextending your business may have a tremendous effect on your finances, as interests and rates can spike rather quickly if you keep spending more than you can repay.

4. Business cards features can be tailored to specific owners’  issuers know very well that cash flow is often unpredictable for businesses, and provide special features such as business-friendly payment terms, exclusive discounts and higher credit limits. A small business owner charges a lot more than a traditional consumer does, so many business credit card carry average spending limits of up to $25,000. Some of them do not carry any spending limit, although users must then pay additional annual fees.

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