Do you own a small business? If yes, have you considered acquiring a credit card that is especially for business financing? Some entrepreneurs may feel comfortable with using their personal credit cards for business. However, there are many good reasons why you should seriously consider applying for a small business credit card. Take a look at the following points:
1. Separate personal and business finance. Combining personal and business finance is not good at all. In fact, business owners are strongly advised to keep their personal and business accounts separate, to ensure effective management and avoid complications.
By applying for a business credit card, you can have a separate account used only for official business expenses. This way, you can keep track of your business spending easily, pay down your charges on time, and avoid overspending.
2. Establish and build business credit. Issuers of personal credit cards do not report to business credit bureaus. Thus, the only way you can establish business credit history and business credit score is to acquire a business credit card that reports to D&B, a business credit tracker.
Remember that not all credit cards advertised as business credit cards offer credit reporting. So before signing up your application, you should ensure that your payments and account activities will be reported to a major business credit bureau.
3. Easier Accounting and Bookkeeping. Business credit card issuers send quarterly or yearly account summary reports. Entrepreneurs can use these detailed and accurate reports to review all transactions they made for the entire year.
Some issuers allow their cardholders to download these reports from the internet so they can be used with a business accounting software. By using these reports as references, you will be able to prepare your business tax files with no hassle. More importantly, you can easily determine which of your business expenses can qualify for tax credit or deduction, making sure that you won’t miss out these savings.
4. Get rewarded for your spending. Some credit cards for business offer reward programs such as cash back, gas rewards, travel rewards, and others. Each time you pay a bill with your business credit card, you also earn points which can be redeemed for cash, rebates, gift checks, and other rewards.
Since business owners are typically confronted with big expenses, you can earn more by using a business credit card with rewards. You can also enjoy exclusive discounts from selected business-to-business merchants and suppliers that are affiliated with your credit card…
5. Supplementary cards for employees. Do you have employees? If yes, you can distribute supplementary credit cards to selected employees so they can simply charge official business expenses to your account. For example, if one of your machines need repair, your employee can quickly call for repair service and use the supplementary credit card to pay the bill. By distributing employee credit cards, paperwork can be minimized and unnecessary delays with the business operations can be avoided.