Advantages of business credit card

What are the Benefits of Business Credit Card

Advantages of business credit card

A business credit card can be a convenient way to quickly access financing for short-term needs and can increase your company’s purchasing power. In fact, 37% of small business owners reported using credit cards just that purpose, second only to a traditional line of credit, according to a National Small Business Association study. However, like any source of financing, a business credit card comes at a cost and must be carefully managed…

Advantages of business credit card

Surveys report that more than 65 percent of small businesses now have credit cards, and this number continues to rise. Of course, not unlike personal credit cards, the same warnings hold true: Business credit cards must be used cautiously and only for the sake of the business. Although business credit cards typically carry an annual fee, it is usually rather nominal. A number of advantages are evident in such business credit cards, including:

  • Separate business credit. A business credit card stands on its own, meaning your personal credit rating is not reflected in your transactions. In addition, by having a separate credit card for a small business, you no longer have to sort out business and personal transactions when it is time to pay taxes.
  • Higher credit limits. Such cards typically carry credit limits of $50,000 or more, making it much easier to make major business purchases that you would not be able to make using your personal credit card or cash.
  • Control on employee spending. A business credit card makes it easier to set limits on spending by employees.
  • Credit rating boost. Having business credit cards, not misusing them, and making timely payments can help boost your business credit rating quickly. Make sure to do business with suppliers who report your transactions to the credit bureaus.

You should also shop around and look at the offers from American Express, Visa, MasterCard, and other credit card companies. Compare interest rates, grace periods, special rewards programs, and everything else that is offered. Look at what additional fees, if any, you will need to pay for such privileges. Before completing an application, you should always read the fine print very carefully.

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