An Ultimate Business Credit Card Guide
Business, credit cards guide, have become an important tool for managing business expenditures, offering a safe, transparent, and responsive credit line. Being an entrepreneur or sole trader, you have to have a business credit card to manage all your business, travel expenses, and other financial issues. These business cards are akin to standard credit cards regarding cash limit, and borrowers are given a limited time to repay the amount in installments each month. This short guide will give you a brief overview of everything that you need to know about these credit cards.
What is a business credit card & what role it plays in the development of business?
In simple words, a business card is a credit card that is issued to a company, as a legal person irrespective of whether it’s a limited company, sole trader, or any other business organization. It is provided to businesses of all sizes, encompassing sole proprietorships. They do not affect an individual’s credit scores, hence separating their business liability from personal liabilities.
The business card plays a vital role in building and development of business. It charges 0% on purchases for six months, and you’ll have to pay zero credit card fees for the next 12 months. Moreover, it also gives you the option to carry your balance forward from first to next month; helping you control cash flow, and to handle finance operations.
How can you make the most of having a small business credit card?
You can get the most out of your business credit cards by
- Keeping transactions all in one place.
- Collecting rewards points.
- Boosting your business credit rating.
3 Things to avoid with small business credit cards
While using your small business credit card always try to avoid:
1. Avoid increasing a balance of charged interest
Never delay in repaying the credit card amount when you’re given an interest-free day, as the interest rates will be charged on your purchases. The interest-free days are applied when your balance is paid to zero Using your business card for personal use
Another blunder most people commit is buying personal items on business cards, which is marked in their bookkeeping. Always note down, or highlight in your electronic gadget, if you ever use a business card for personal use and let your accountant know about this so that it won’t be included in your personal expenses then.
Spending for the sake of reward points
Avoid excessive use of a business card for the purpose of getting rewards points or cash back facility. Plan a business budget and balance your expenses according to it, as you have to afford your business card balance by the end of a month.
Business Credit Card Guide
Despite the fact that business credit cards help in building and development of business, and are useful for your company expenses, yet they’re some drawbacks which you might encounter due to excessive purchasing of items, and wrong use of cards.