Should a Small Business Owner Apply for a Business Credit Card?
Some people think that business credit cards are only essential for large businesses and corporations.On the contrary, credit card companies have come up with a line of business credit cards that are especially designed to cater small businesses.
Is it really necessary for a small business owner to apply for a business credit card? What benefits can a small business can gain out of it?
Why Some Business Owners are Hesitant
Overspending, getting stuck in bad credit, high interest rates and complicated processes are some of the reasons why some business owners reject the idea of applying for a business credit card. Are these fears valid? Let’s talk about these issues one by one.
Overspending and Bad Credit
A credit card holder runs the risk of overspending and getting into bad credit if he will not use his credit card responsibly. The same principle applies to business credit card holders. The key to avoiding bad credit and overspending is by keeping your charges in control and paying your debts on time.
The truth is, business credit cards have lower interest rates compared to personal credit cards. If you do your research, surely you can find a business credit card in the market that offers reasonable interest. Add to this, not paying interest is very possible if you keep your payments on time.
The process of applying for a business credit card is pretty much the same with a personal account. After reading the terms and conditions and filling up your credit card application, you can submit your application online and wait for approval. Most business credit cards offer instant approval for those with good personal credit.
When it comes to managing your account, business credit cards actually make your book keeping and accounting tasks easier. Through its online account access, one can check his business expenses and payments regularly. Quarterly and yearly summary of accounts are also available and these reports are often categorized or itemized so you can clearly track the kind of purchases made.
Other Advantages of Business Credit Cards
The option to give additional credit cards to your employees is a tremendous help for a business. This saves you from unnecessary tasks like manually approving requests even for the smallest amount of cash while still keeping track of your business expenses.
Another advantage is that business credit cards often come with great reward programs so you can earn incentives from the large purchases you spent using your business credit card. Compared to personal credit card, a business can gather reward points at a faster rate and earn bigger rewards too.
Finally, business credit cards help a small business build credit. An excellent credit will come in handy when you decide to expand your business and the need to loan additional business funds arise. Small businesses with an excellent business credit score will have no problem getting an approval from business loan lenders.