For some people the thought of owning credit cards only increases the risk of getting stuck in bad credit. This is the same notion shared by some business owners. These entrepreneurs refuse the idea of getting a business credit card, afraid that it will only bring debt problems in the future.
But the fact is, the benefits or bane of owning credit cards all depend on how the holder uses them. If you’re a business owner, it is possible for you to get the most from your business credit card without getting yourself in a bad credit situation. How? Here are the ways on handling business credit cards effectively.
Charge only what you can pay off on your due date.
Business credit cards can be an indispensable tool when you’re confronted with unexpected business expenses. For instance, when a customer makes an exceptionally large order, if one of your machines break, or if you need to buy new equipment. With a business credit card, you can push through with your business operation even when you don’t have the cash upfront. The important thing to remember is to charge only the amount that you know you can afford to pay back by the end of the month or by your due date. This way you avoid incurring additional interest charges.
Don’t use your business credit card for cash advances.
Cash advances are not included in the grace period that comes with your card. This means you instantly incur the interest the moment you took out the cash from your account. If you need cash, don’t get it out from your business credit card.
Check your account regularly.
Business credit cards today come with online account access option. This is an incredible feature business owners should take advantage of. It is a big help in your accounting and you can check on your account from your own computer at any time. Some business credit cards even let you download your account summary so you can use it along with the accounting software you use.
Distribute employee credit cards.
Most business credit cards include additional employee credit cards at no extra charge. Use these extra cards to distribute to your staff so they can make business purchases on their own. This also enables you to track exactly when the purchase was made and what type of purchase it was.
Earn your rewards.
One of the most exciting things about business credit cards is its reward programs. Take advantage of the large purchases you charge on your card by earning rewards. Thus, when choosing a business credit card, don’t forget to consider the type of reward program it offers and make sure that it will work for your business.
Build good business credit.
Use your business credit card to build an excellent credit history for your company. This can be achieved by submitting your credit card payments on time and keeping your charges below your credit limit.