3 Reasons Why You Should Get a Business Credit Card

If you own a small business then chances are you have troubles maintaining cash flow, have fewer options, and you might not even realize that keeping your personal and business expenses can help you save a great amount of time. These are all some of the key reasons why you should get a business credit card, from simple time-saving solutions to more advanced perks of having a business card. Be sure to read for more information.

Source: Reginald Chan

1. To Separate Personal and Business Expenses

One of the utmost reasons you should get a business credit card is to separate personal and business expenses. This is especially true if you own a small company or if you’re a solo entrepreneur because it can be quite tempting to use a single credit card for all your expenses. If you’re wondering why it’s important to separate the two, the simple answer is – it can save you plenty of time every month. In addition to this, it’s much more convenient for record-keeping, and it can help you complete your annual tax return more easily. By having two separate bank records you effectively relieve yourself of having to go through a single record and pick out which part is from your business and which was for personal use. This not only alleviates the stress from your both business and personal life, but it also saves you a lot of time.

Speaking of time – you know the famous saying “Time is money”. This is true for a reason, and a small business owner needs to understand. If you spend too much time going through your bank records so you could figure out what amount of money you spend for personal pleasure and which were intended for your business, you will soon be out of a job. Running a business, especially in its formative years is extremely important and the main reason why you should have more time to better adjust to your customer needs, demands of the market, keeping competition at bay, as well as making sure your business is growing. Doing these annoying clerical tasks which don’t even fall under proper business accounting is just a waste of time that can easily be avoided by separating your personal and business expenses.

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2. Cash Flow

It is common knowledge that one of the most common problems of small businesses, solo entrepreneurs, and freelancers is to maintain cash flow. This is where business credit cards can come in and help save the day. They can offer a revolving line of credit that you can simply use when you need to make a slightly more expensive business purchase, or when work is really slow. Another great use is when you’re waiting on incoming checks from clients. With many options out there, you should focus on getting matched to the best offers based on your business card information. You can see options here to see which business credit cards you will most likely qualify for, so you could apply as soon as possible.

Ultimately, make sure you compare as many business credit card offers as you can to get the best deal there is for your specific needs. As you’ll see later on in much more detail, every business has its own specific needs and logistic strategies which means no two businesses will have the same business credit cards with the same perks. However, some of the key deciding factors that can significantly help you choose which business credit card is the best for you are the annual fee and the purchase APR. Purchase APR stands for purchase annual percentage rate and refers to the interest charge that is added monthly to the outstanding balance due on a (business) credit card. These two factors are the first ones you should consider.

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3. Additional Perks

If you own a small business, you might have a better understanding that business owners have very different needs than consumers do. This is why many banks offer expense management on business credit cards or some form of transaction to help out small business owners stay organized. Some go as far as to offer free employee cards which can help you to boost your rewards up even faster. Some of the things to look out for in business credit cards are extended warranties and great purchase protection. This way you will ensure that your small business doesn’t end up financially responsible if you buy expensive products that are either damaged or end up lost. These additional perks of having a business card can protect you from severe financial strains, which are almost impossible to avoid when you run a business, nor should you be constantly on the lookout for the worst.

Other perks of having a business credit card that is worth the mention are that it can help you boost your business credit rating, and it can offer additional advantages that personal credit cards don’t include. If you have a business credit card and you’re paying off the balance regularly, this can easily help you to boost your business credit rating through the roof, provided that the suppliers and vendors you work with report transactions to the credit bureaus. There are other numerous perks of having a business credit card to choose from, but they will ultimately depend on your specific needs as a business owner. Some of the most important factors to consider are your priorities (travel, cashback, rewards), the amount of credit you need, as well as the size of your company. Be sure to weigh all the options before you apply.

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These are just some of the reasons why it might be a good idea to get a business credit card. Business credit cards are all the more important and can help you a great deal if you own a small business as it’s much harder to maintain cash flow, and you need added benefits that wouldn’t be available otherwise. Be sure to consider the purchase annual percentage rate, as well as the annual fee to help you narrow down to the best choices of credit cards for your business.

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