Whether you have your own business or want to start running one, small business
credit cards may be the right choice for you. They offer many useful features to
help your business thrive and grow. For example, you can separate business expenses
from personal spending and keep detailed records of business purchases.
It will
make your bookkeeping tasks a lot easier to handle. However, remember that business
credit cards are not flawless, so everyone has to be smart in using them.
Did you
know that 75% of all business owners in the U.S. are small business owners, with
no employees? That’s why issuers generally offer two kinds of business credit cards:
small business cards and corporate cards. Each type has its own advantages and disadvantages.
Actually, credit cards for small businesses work similar to consumer credit cards,
but they carry the name of your business instead of your name. Small business credit
cards require a personal liability agreement from the business owner at least for
the first few years until he establishes a solid business credit score.
Therefore,
the business owner can be responsible for any problems with the company's credit
account. For example, if your company defaulted on payments then it could significantly
damage your personal credit score even though it is not a personal card.
Small business
credit cards can help you run your business more efficiently.
First of all, they
help to establish business capital. You can use your plastic to make necessary purchases
and pay off the expenses in installment mode.
If you get short of cash in the middle
of your business process, your credit card will help you cover expenses and continue
operations.
The main advantage of business credit cards is that they help you keep
business and personal expenses separated. It is not a secret that some people use
their businesses to cover their personal expenses because they think it is also
their money, so they see no difference what to spend. By doing so, you can get in
trouble with the IRS. That’s why if you go to Costco to buy fax paper, and you also
pick up a couple of apples for yourself, it’s much better to use separate cards
to pay for purchases.
Most credit card issuers offer special online tools that will
help you analyze where your money goes. The cardholders can get an annual or quarterly
report detailing all purchases that were made on your account. It helps when it
comes to bookkeeping and paying taxes.
Business owners who have employees can authorize
them to use their small business credit card or order additional plastics for them.
It will make tracking of employee expenses easier.
Small business credit cards usually
offer better perks and rewards than personal cards. If you regularly buy a lot of
items for your company, find a credit card with beneficial rewards program. You
can accumulate cash rebates or points for every dollar you spend. If you need to
travel, search for an air miles credit card that offers bonus miles.
In addition,
small business credit cards may include significant discounts from affiliate retailers
or service companies for such often used services as mail deliveries or shipping.
It can help your business save plenty of money.
You can find small business credit
cards from the leading American issuers which
offers credit cards only for business owners.
Despite uncertain economical times, most small business credit cards still come
with an attractive APR and moderate fees.
If you have a small business credit card,
the main guideline to follow is the same as with personal cards. Make regular timely
payments, live within your means and don’t spend more than you can afford. Try to
pay off your balance in full each month – it will help you avoid interest charges.
A smart money management will help you maintain a positive credit score and add
credibility to the name of your company.