Understanding Credit Cards For Small Business

Small Business Credit CardsSo you’ve been considering a business credit card, but your reluctant because you feel you’re not big enough for a business credit card. Think again. Most financial advisers consider a business credit card a necessity. There are so many reasons to embrace a business credit card that whether small or large, your business can be considered in the dark ages without at least one business credit card. Even if you are not in business, you can qualify for a business credit card and gain numerous benefits for doing so. 

It is hard to believe that even today, many U.S. companies continue to pay bill the old fashioned way, by writing checks, not using business credit cards. In reality, business credit cards should be an integral part of any business cash management strategy. Business credit card usage is even more valuable if you are a start-up business – while not using business credit cards is inexcusable for established companies.You can find lots of great examples of high risk merchant accounts at this site. www.mypaymentsavvy.com

While there are many reasons to use business credit cards, most business advisers generally point out a few top reasons for business credit card usage. Even before looking at reasons for using business credit cards, you should understand that a business credit card works very similarly to a personal credit card. So right from the start, your apprehension about using business credit cards should be allayed. You can even sign up for your business credit card at your local bank, just as you would a personal credit card.

One of the chief benefits of a business credit card has to do with your personal credit score. Business credit cards allow you to separate your personal business from your business. This is important, especially if something goes wrong with your business. If anything goes wrong, and you have a business credit card, only your company credit score will be affected, not your personal score. There’s a related benefit, too, in having a business credit card: it will help your company become approved for business loans and lower interest payments no matter what may go wrong with your personal credit. More about this later.

A second major benefit of business credit cards: a business credit card typically has a higher credit limit. Why is this? Because a business generally requires more funds than your household expenses. Some business credit cards will give you as much as a $75,000 credit limit.

This brings us to a third benefit of business credit cards, especially meaningful to a busy hands on small business operator or start up company: business credit cards help you monitor credit card activity for all employees who are given the opportunity to use the company’s business credit card. This is another feature that may allay the fears of adopting business credit cards for your small company. The owner can set a limit on spending, control where the card can be used and even block the card if necessary.

While financial advisers sometimes caution against getting caught up with rewards programs associated with personal credit cards, the opposite is true for business credit cards. Rewards are one of the very special benefits of business credit cards. Business credit cards offer rewards that are custom created for your particular business. Your business credit card offers special deals on employee travel as well as those necessities often taken for granted, such as office supplies and software.

But in the final analysis, it all goes back to the fact that business credit cards can be kept separate from your personal credit. It allows you to be concerned more about the operation of the business rather than worry about finances.

We already discussed the relationship business credit cards have to your credit score, but another ancillary benefit is the way business credit cards build credit in the name of your business. This is the factor that comes into play when you determine that you might need a loan to expand your business. When you have a solid business history independent from your personal credit history, you are more likely to get the loans you need in the future. A business credit card is one of the best ways to build your business credit, and create a solid foundation for the financial reputation of your business.

A seldom realized benefit of using a business credit card comes to light at income tax time. By keeping your business expenses completely separate from your personal expenses, your accountant will have a much easier time preparing your business return. If you plan to deduct business expenses on your taxes, your business credit card records are a sure way to prove that they are truly business expenses and that they are separate from your personal expenses.

d can even have a positive psychological effect on your self-image as a business operator, making you feel that you have “arrived” as a bona fide business owner, and not just a business hobbyist.

There is no question that your business will run more smoothly with a business credit card. You will be amazed at the simplification of your bookkeeping efforts with the aid of your monthly business credit card statements. Business credit cards are not just for large organization – they’re essential for even the smallest mom and pop business. The advantages of business credit cards are so overwhelming that they are as essential to your company as the products you sell. Do you need a business credit card? Absolutely! Obtaining a business credit card can be one of your best business decisions ever. But as with every aspect of credit, use your business credit card wisely – and watch your business grow!

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