Getting a credit card that is solely for your business use is a wise and practical move.Although it is not recommended to rely on your credit card alone in funding your business, it has its advantages.
First of all, having a credit card for business helps you separate your personal and business finances. It avoids possible complications that come when you use your personal savings account in managing your business expenses.
A separate business account also enables you to track your business finances more accurately and with less work on your part. This is because business credit cards provide their clients with up-to-date summaries of their business account on a quarterly and yearly basis. So the next question is how to choose the right credit card for your business?
Business or Corporate?
If you’re running a small business, then a business credit card would be suitable for you.For larger corporations, the corporate credit card is best.Is there a difference?
A business credit card works like your regular credit card except that it’s on a separate account. You’ll be given a credit limit and you’ll be paying off your balances on a monthly period. If you have business partners, then you will not be the only person responsible for it. As a company, everyone who’s authorized to use the business credit card will be accountable.
A corporate credit card is somewhat more complex than a business credit card. Its features and conditions can be customized to suit the exact needs of a large company. The executives of the corporation would meet with the bank’s representatives to make the necessary arrangements and preparation. Thus, application and approval takes time and more elaborate processing.
For a small business owner, you may choose from a list of your prospective credit card issuers and compare each other’s rates. Just like in choosing your personal credit card, it’s important to look beyond the introductory rates being offered. Make sure that the APR stays reasonable even after the introductory period expires. Remember, you should go for the business credit card with the most reasonable interest rate offer. Take advantage of the internet by comparing rates online.
Choose Your Rewards Well
Depending on the nature of your business, you may choose a business credit card that offers a rewards program that will be most advantageous for your business. Does your business require you to travel a lot? Then you may opt for a business credit card with frequent flyer miles program. If you’re into a buy and sell business, why not take advantage of a cash back credit card that rewards you for your purchases? Again, this is a factor that you should carefully consider. Choose a business credit card that you can most benefit with.
In line with this, business credit cards are often affiliated with certain merchants or stores. This is one of the factors you would want to consider when choosing a credit card for your business. You can make the most out of the credit card’s reward program if you connect with your business credit card’s affiliates. This partnership will not only benefit your bank and its affiliates but most importantly, you.
Your Final Choice
Weighing the advantages and disadvantages of each business credit card over the other may require some studying on your part but you can be sure it’s worth taking your time. Comparing the rates, the incentives, and all costs that are associated with your business card are all essential elements in choosing your business credit card. Also, check out each business credit card’s terms and conditions for a more in-depth evaluation.