Negosentro|4 Reasons Why You Need a Business Credit Card|Not everyone has large amounts of cash just lying around. Unfortunately, many business owners face this situation. However, that doesn’t stop the expenses from coming in. For example, if you run a restaurant, you might have issues with your equipment on a regular basis. This means that you’re constantly replacing it. But eventually, that money can run out, especially if there are limited amounts of it.
Luckily, you can offset some of these expenses with a business credit card. Business credit cards can help your business establish its own credit file. There are many reasons to get a business credit card.
1. They Keep Expenses Separate
While you can use one credit card for both your business and personal expenses, it’s best to keep your personal expenditures separate from your business ones, especially when tax season rolls around. Having all of your business expenses makes it easier to gather information for taxes, loan documents and financial statements.
With a separate business credit card, you can track expenses more easily because you can see exactly how much money your business spent. Plus, if you have an accountant, you can save on accounting fees because your accountant doesn’t have to sort through personal versus business expenses. This setup also makes it easier to get things straightened out if you’re ever audited by the IRS.
2. They Help Build Your Credit
When you get a business credit card, you’ll get a business credit score. If you use your card responsibly and make payments regularly, you could improve your credit score. As a result, you’ll benefit from lower interest rates if you need to take out a business loan. You could also take out larger loans without a personal guarantee. This benefit could come in great handy one day. For example, a major expense could come up. That large, low-interest loan could save the day.
Some card issuers also report business card activity on personal credit reports, so if you’re doing well to maintain your business credit score, your personal report can reflect this as well.
However, you could experience a hit to your business credit score and personal report if you aren’t using your card responsibly. Therefore, if you don’t pay your bill on time or you’re using too much of your available credit, it could hurt your credit score. That’s why it’s so important to find out how card issuers handle credit reporting before signing up for a card.
3. They Offer Rewards and Perks
One of the benefits of having a business credit card is that you can earn credit card rewards. If you pay your credit card bill in full every month, you could earn at least two percent cashback on all of your business purchases. Business credit cards also tend to have better terms than personal credit cards, such as higher credit limits and extended billing cycles. You can visit a site called Nav.com to get more information about business credit card rewards and further help with financing.
4. They Give You More Spending Power
Most business credit cards come with higher lines of credit. This is often how many small businesses get off the ground. Most people understand the huge expenses that come with running a business. But some business owners have yet to learn about the increased spending power they can get with business credit cards. As long as you’re paying your bill on time and not going over your credit limit, you’ll get the perks of a high credit limit every month. No business owner wants to be bogged down in a sea of expenses. Business credit cards can help take the financial load off and make life easier.
At first, you might be reluctant to get a business credit card. But if you’re generating enough revenue to make your monthly payments, a business credit card could be worth your while.