The Advantages of Business Credit Cards | CreditShout

The Advantages of Business Credit Cards

By Kevin / August 25, 2009


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If you own a business chances are you’ve considered opening a line of credit to buy the equipment or supplies you need. Did you know that business credit cards, on the other hand, can be much easier to obtain and offer you a number of advantages? These credit cards are aimed at and designed specifically for small business owners. About 65% of small businesses today have some number of small business credit cards. Here’s a run-down of the benefits you can enjoy with these credit cards, especially when compared to personal credit cards.

Much higher credit limits. Business credit cards usually have credit limits of at least $50,000 although they can go much higher. This makes them a great way to make large business purchases without using cash or a personal card.

Boost to your credit rating. Business credit cards have another advantage many don’t think of immediately: they provide a large boost to the credit rating of your business, provided you use them correctly. Of course, if used incorrectly business credit cards can hurt you badly because transactions are reported to the credit bureaus.

Separate business credit. There’s much to be said about separating your business credit from your own. It allows you to keep personal expenses and those of the business separate, making tax time much easier. It also means your own credit rating is not reflected in your business, giving your business a chance to stand on its own legs.

Easy way to track spending. Business credit cards provide a great way for owners to track business spending because these credit cards usually include itemized statements sorted by category. Of course, this makes business record keeping a breeze and helps protect you from unneeded spending.

Control employee spending. With a business credit card you also have the ability to track and control the spending of your employees. When you sign up for the account you’ll have the ability to give your employees their own credit cards attached to your account. Each card can be set with a spending limit by you, effectively giving each employee a safe amount of credit to use.

Free up cash. A business credit card also gives you the opportunity to free up your cash to use on other things. Having available cash is often important with a small business.

Manage your account online. These credit cards also give you the ability to manage your account online. This lets you review your account, record transactions in your own records and track and manage employee spending with ease.

Rewards. A list of the advantages of a business credit card is not complete without mentioning the rewards you can earn. It’s common for these credit cards to come with discounts at many suppliers and merchants as well as discounts on business-related travel. This can help save you a lot of money in the long run and make the card worth your time.

It’s up to you to decide if a business credit card will benefit you and your business. Keep in mind these credit cards can be abused just as easily as personal credit cards. When misused, the credit rating of your business will be hurt and you may find it harder to do business. For this reason only consider a business credit card if you have the responsibility to use it properly and can benefit from a way to stay on top of transactions and earn rewards.

If you want to look for a good business card make sure you shop around. Compare everything, including the terms, rates and reward programs. There are dozens of business cards offered by the major card issuers like Visa and American Express so make sure you find one that’s perfect for your business needs and remember the potential impact it will have on the credit of your business.

The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone. Additionally, the opinions of the commenters are not necessarily the opinions of this site


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