Business Credit Cards
All businesses need some sort of credit when it comes to daily transactions, payments to vendors or travel expenses or myriad other reasons. Credit cards are good options for possible emergency expenditure in your business. You might wonder what the advantages of a business credit card over a personal credit card are? Read on to find out the advantages of having a corporate / business credit card for your company.
Advantages of a business credit card
Higher credit limit: A business credit card comes with a higher credit limit compared to personal credit cards. Having a business credit card means you will be able to handle all your business transactions with ease without running the constant risk of utilizing your credit limit to the maximum.
Allows separation of business and personal expenses: A business credit card also helps keep track of expenses. It is a good way of account keeping, as all your business-related expenditure will reflect in your statement of accounts. This will help you understand your expenditure and better manage it. Business credit card issuers offer a spend management tool which can come handy in analyzing your company’s spending pattern. This helps control and rationalize expenses better, rather than resorting to across the board budget cuts. Your business would benefit through the customized data analysis, e statements and detailed insights of all transactions made on the card.
Doesn’t affect your personal credit score: It is a good idea not to mix up business expenses on your personal credit card, so that your business’s outstanding credit does not adversely affect your personal credit history and score. This will prove to be helpful when you apply for a new line of credit in the future.
Builds the company’s credit history: Having a corporate credit card exclusively for your business also helps to build your company’s credit history. Several investors consider the business’s credit history before investing, as it gives them an idea of the way you manage your expenses. If you approach a bank for a business loan, having a healthy business credit history will help you get the loan quickly.
Choosing the right corporate credit card for your business is crucial if you want to get the most out of them. Many banks issue credit cards specifically for business purposes and it is important to choose the right one given the sheer number of cards available. Before choosing a business credit card, consider the following:
• Does your company really need a credit card?
• What kind of credit card do you need? For instance, if you travel frequently, it would be more sensible to get a credit card that gives Airmiles for transactions done with your card.
• Do you require add on cards that your employees could use in your absence?
Carefully consider these questions before applying for a business credit card. The variety of attractive offers and rebates available makes a business credit card a desirable option, if all credit card dues are paid consistently every month.