Author | Aram Anthony
As a business owner, you work hard and are constantly on the lookout for tools that can make your life easier, especially when it comes to your business’s finances. For many owners, a business credit card is an essential part of their financial strategy. They like the mix of convenience, rewards and buying power that a dedicated business credit card offers.
There are many types of business credit cards available, so it’s important to choose one that aligns with your business’s needs and goals. The right business credit card can help you grow your business while providing you with substantial rewards and benefits.
Why carry a business credit card?
Unlike personal credit cards, business credit cards are specifically designed to give business owners access to features that can help them grow their business. While many business credit card benefits are the same benefits as personal cards, they can also offer unique benefits and rewards you won’t find with a personal credit card.
When you carry and use a business credit card, you can:
1. Reward yourself with cash back
Similar to personal credit cards, business credit cards often offer cash-back rewards, as well as substantial sign-on bonuses for reaching a specified spending threshold, usually within 60-90 days. It’s worth noting that business credit card cash-back programs are often more generous than those offered by personal cards.
2. Benefit from a revolving line of credit
Businesses have ongoing spending needs, so it makes sense to have a line of credit you can access again and again as you pay it down.
3. Increase your purchasing power with a higher spending limit
As a general rule, business expenses can far exceed personal ones. Business card issuers recognize this fact and offer much higher spending limits on their business credit cards than on personal credit cards. Your credit limit will be a reflection of your business’s size and revenue.
Of course, you don’t want to bite off more than you can chew, so you’ll want to make sure you can pay off your purchases sooner rather than later.
4. Simplify your life by keeping your business and personal finances separate
Maintaining separate credit cards for your business and personal expenses will not only make bookkeeping easier, it will also simplify your tax filings (and your accountant will thank you!).
New business owners are often tempted to put business expenses on their personal cards, but doing so will not only complicate bookkeeping, they’ll miss out on the more attractive rewards program offered by most business credit cards.
Similarly, you should resist the urge to put personal expenses on your business card. While the rewards and cash back program will likely be substantially better on your business credit card, you’ll risk muddying your financial picture by cross-using your cards.
5. Improve your cash flow management
As hard as you might try, there will likely be times when your expense needs and revenue will be out of alignment. This is especially true of cyclical or seasonal businesses. When these short-term gaps occur, a business credit card can help you preserve your cash reserves while covering your needs without the need of taking on a loan.
6. Enable and control employee spending
If you want to allow employees to purchase goods and services on your business’s behalf, giving them a credit card tied to your business credit card account can simplify expense tracking and reimbursements. Many business credit cards provide robust tools to help you track and manage employee spending.
In addition, most business credit cards will break out your spending by category on your monthly statement.
7. Enjoy better rewards and perks
Reward programs for many business credit cards go far beyond those programs offered in most personal cards. They can extend beyond cash-back and rewards point-based programs to include perks that can include access to airline lounges, discounts on office supplies, rental cars and more.
8. Build your business’s credit profile
Just as your personal score helps to determine your credit limit and loan eligibility, so can your business’s credit score. By establishing a solid history of on-time payments, you can assure lenders that you are reliable safe bet and can become eligible to borrow higher amounts at lower interest rates.
9. Secure a higher level of purchase and fraud protection
Not every purchase goes smoothly. Some may be lost, stolen, or just not delivered. And sometimes you can become a victim of outright fraud. Most business credit cards offer purchase and fraud protection exceeding that offered on personal cards or even business debit cards.
10. Easier and faster than qualifying for a loan
Applying and getting approved for a business credit card is very often a faster and easier process than applying for a small-business loan. This is especially true for new businesses with insufficient collateral to guarantee the loan.
California Bank and Trust has a business credit card right for you.
Our business credit card offerings include a collection of benefits, tools and rewards designed to help you grow your business efficiently and quickly. Choose the one that best meets your business’s needs1.
If you are ready to find the right Business Credit Card to fit your needs, follow the link below to get started:
https://www.calbanktrust.com/business/business-credit-cards/
Disclosures
( 1 ) Credit Cards are subject to credit approval. Terms, conditions and restrictions apply; see banker for details.