Now that you’ve made the decision to get a credit card for business, it’s time to focus on how you can use it to your advantage. Below are some practical tips on how you can get the most benefit from your small business credit car.
Use your business credit card to build a positive business credit. Establishing and building up a separate credit history for your company would be a lot easier when you have a small business credit card account in your name. Establishing business credit early is important as this prepares your business for future growth.
Use your business credit card exclusively for business purposes. A small business credit card is meant to be a tool for easier management of the business. Nevertheless, some entrepreneurs can make the mistake of using their business card for personal expenses such as dining or shopping. Remember that you can minimize the risk of bad debt if you’ll be discreet with the use of your business credit card.
Pay off your monthly balances in full. The best way to protect your business credit from negative marks is to pay off your balances in full. Another advantage of paying your entire balance is that you can save from the additional interest rate costs.
Stay below your credit limit. Even if you enjoy a higher credit limit, financial experts recommend not using more than 40% of your allotted credit line. It doesn’t matter whether your credit card offers a low APR. Bear in mind that maximizing your credit limit can affect your business credit rating.
Keep track of your expenses. Use your business credit card to keep track of your business spending more quickly and conveniently. Make use of the online account access feature and the yearly account summaries provided by your business credit card.
Use your account summary with your accounting and bookkeeping. Issuers of credit cards for business provide quarterly and yearly account summaries which can be downloaded and used along with your accounting software. Use this feature to your advantage especially when it’s time to file for your business taxes.
Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on credit cards for bad credit,credit cards for good credit and other credit-related issues. Its main objective is to help people build good credit. Copyright © 2008