What Are the Advantages of Business Credit Cards?
What They Are – Small business credit cards provide business owners with easy access to a revolving line of credit with a set credit limit in order to make purchases and withdraw cash. Like a consumer credit card, a small business credit card carries an interest charge if the balance is not repaid in full each billing cycle. You may be able to get a credit card through your bank or you can compare cards terms and features – and apply online – through our credit card tool…
Top Benefits of Business Credit Cards
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.
Business Credit Card Pros – Along with providing necessary cash flow to help maintain and build your business, credit cards can offer these advantages:
Financial Bookkeeping Assistance: In addition to receiving a monthly statement, most cards provide small business card holders with online record-keeping tools to manage their accounts, including a year-end account summary which can help a bookkeeper track, categorize and manage expenses. It can simplify bookkeeping, help when using outside professionals to navigate an audit and pay taxes, and provide an easy way to monitor employee spending.
Easier Qualification: It can be easier for business owners who do not have a well-established credit history to qualify for a revolving line of credit with a credit card, rather than a traditional line of credit or bank loan.
Financial Cushion: A credit card can provide business owners with a much-needed financial “cushion” when accounts receivables are behind or sales are slow and the business is short on cash.
Tool to Build Credit: Responsibly using a small business credit card – which means paying the bill on time, paying more than the minimum due, and not going over the credit limit – can be an easy way in building up a positive credit report for your business. That, in turn, can help you be more likely to qualify for a loan or line of credit, and at a potentially lower interest rate, in the future. (To learn more, see 5 Ways To Raise Your Business Credit Score.)