Business credit cards, also referred to as corporate credit cards, allow you to keep you business expenses in one place and also build purchasing power to help you run your business more efficiently. Many cards also reward you for purchases with cash back or airline miles.
The primary reason for getting a business credit card is to keep your business expenses separate from your personal expenses, so that if things go south with your business, you can keep your personal expenses from suffering.
Another reason for getting a business credit card is build your business credit history to make it easier to secure loans as well as reap benefits of every day spending such as vendor discounts and rewards. Additionally, having a card just for your business helps with bookkeeping by having all your expenses in one place.
When choosing the best business credit card for your business, it is important to keep in mind your buying habits and goals. If you travel a lot, look for one that offers rewards in the form of airline miles or gas rewards, if you travel by car. If you plan on heavy usage, then ensure that the issuer will give you enough credit limit. You might also be able to find a business credit card that offers rewards in the form of discounts from local suppliers.
Credit card issuers may want a personal guarantee before extending a line of credit. You should try to avoid doing that as it would put you personally liable for any unpaid debt. The purpose of a business credit card is that you keep your business expenses and debts separate from your personal accounts. However you will need to have solid personal credit history to show that you are capable of paying on time.
Remember that how you use your business credit card is one of the key ways to build your credit score and credit history. You want to ensure that neither your nor anyone on your team abuse the credit. If you choose to give a business credit card to any of your employees make sure that they know the limits and how to responsibly use the credit card. You may also choose to have a lower credit limit for individual employees.
Business credit cards can be a real asset to your business if used correctly.
