Do You Need a Business Credit Card?

Even if your business is small sized, you must have wondered at some point in your business career if you need a business credit card. Well, to answer that question, let us look at the advantages of subscribing to one and how it may help your business.

Legitimacy & Credibility

The first and foremost change you would bring about by getting a business credit card is that of perception. Your customers, business associates, employees and even you, the owner will begin to perceive your business as a legitimate organization with credibility. With this you would have automatically distinguished your business from your competitors and most likely, moved your company up to the next level.

Easier Bookkeeping

Most people dread reconciling the accounts. However, the day-to-day operations of your organization can be made a whole lot manageable with a business credit card. Your expenditure on purchases, operation and office necessities can be made with the card. There is no need to fork out any cash. The best part is that you can keep track of every expense with the management reports that are provided with the card. These reports even include itemised listings of purchases. Now, that makes bookkeeping seem like a breeze, doesn’t it?

Separate from Personal Expense

Business credit cards are issued in the name of the company and not yours. This allows you to keep your personal and business accounts separate. Furthermore, the debts of your company become the responsibility of the business and not you.

Note of caution: If yours is a new business, the business credit card may be issued based on your personal credit history. You may even have to sign a personal-liability agreement. This is not recommended (but mostly unavoidable for new businesses) because if you run into any problems with payment, your personal credit history may be severely affected although the expenses were not personal but for your business. In order to establish a distinct business credit history, you may want to register your company with a business credit bureau as soon as possible. This allows you to eventually give up your personal-liability agreement.

Benefits to Key Employees

It is inevitable, sometimes, for employees to have to shell out their own money to cover purchases made for the company. This practice, albeit common, is not fair to them. Providing your key employees with a business credit card will eliminate this practice and make the running of your company smoother and more efficient.

Note of caution: Although business credit cards prove to be advantageous, there is a real danger of employees being dishonest and misusing the business credit cards. Be vigilant and keep track of any spending on the business credit cards using the management reports. If you discover any instance of fraud, report it immediately.

Spending Limits

This feature is usually considered a plus. It helps keep your business expenses in check and prevents the danger of getting into debt. There are usually limitations on purchases as well as withdrawals from ATM. These limits are also applied to the business credit cards that you may issue to your employees.

Savings & Safety

By paying for your expense only once a month, you would effectively be stretching your company’s dollars further. Moreover, as long as you pay within the grace period (please do this religiously), you will not have to pay any interest on the amount that you had borrowed from the credit card company.
Using business credit cards is usually cheaper than using cheques.
With business credit cards, you can make online purchases or orders which are usually more economical as compared to buying in stores.
You can also avoid carrying around large amounts of cash when making purchases or paying for the operations of your company.

Perks & Rewards

Business credit cards are often complemented with perks and rewards such as flying miles and discounted hotel stays. Compare these perks and select a card that suits your particular business needs. Choosing the right set of perks and rewards may help you save on your business operation costs.

Business credit cards can prove to be an asset as long as you use them wisely and carefully. Compare the offers available thoroughly. Watch out for any hidden costs and read the fine print in your contracts circumspectly. Do not be swayed by the attractive perks. Compare the perks as well as the rates, customer service, terms and solutions conscientiously and you’ll probably save yourself a lot of money.

Best Business Credit Cards – Separate From Your Personal Credit

Finding the best business credit cards is all about what is current and happening right now. Many people may think they are offering you good advice because they worked in business for 20 years, but retired five years ago. Many times, their advice is no longer valid in many aspects of current business because so much has changed from five years ago in the business lending environment. Even six months can make a difference in the world of business and the best routes to take. For example, many people who worked in business might suggest that you go to Bank of America for unsecured business loans of credit if you are trying to get a new business started. This is only a valid option now if you have an established business that can show income verification from the past two years or more.

At this particular time, there are banks you can expect the top corporate credit cards from, but they could change again. That is why it is important that when receiving guidance on the topic that you work with someone who is in the current world of business, out there working for a living right next to you.

Furthermore, when you obtain a current list of banks and lenders, do not simply apply to everything out of thin air. There are tricks of the trade that can help you build your business credit profile the right way and get approved.

First it’s important you understand what the terms/conditions of the cards are. They are lines of credit with the name of your corporation attached to them that will not reflect upon your personal credit. What you do with your money on a personal level and for your business are completely separated with the use of a business credit card. This is as it should be. In fact, utilizing a business line of credit can help you pay off personal debt and help you appear virtually “debt-free” to lenders as a result.