Many of us dream of becoming our own boss and running our own business. No matter you're your passion is there are many rewards and challenges when you break away and become an entrepreneur. Setting up the business can be nerve-wracking and as the boss, you have a great many decisions to make every single day.
One of these is how to finance or track expenses for your business? Are you using cash alone? How many loans should you take out? Should you get credit cards for your business expenses? These are a few of the questions that you have to answer and only a few of the business decisions you have to make.
Why should you get a credit card geared solely for your business? Shouldn't you just use whatever credit card you have with you at the moment? It's actually a great investment that you use to turn your business into a better one. You don't have to worry about interest, most business cards have 0% interest.
Here are the reasons you should consider getting a business credit card:
Business cards help you keep track of your expenses separately - this means that you don't mix up your personal expenses. It doesn't matter if you've been in the business six months or twenty years, tracking expenses can be a hassle. Anyone who has counted receipts daily or at the end of the month knows this. Business credit cards include all charges made to your account. You can easily see which ones are authorized every single month when you receive your statement. You don't even have to wait till the end of the month because most credit card providers actually let you access your statement online, every day, free of charge. No twenty minute wait to speak to a customer service representative. Your daily expenses are right there, on your screen, any time you want it.
This is also a great way to keep track of your personal expenses versus that of your company. A lot of business owners pour a lot of their personal finances into the business without realizing how much they are actually putting in. A business credit card will help you remedy that and you can actually see how much you're spending. This means that it'll help you keep your credit history clean in the event that the business fails. Business credit cards can be used to establish a separate credit history for your company. Just register it with a credit bureau and you should be able to keep your head above the water if something goes wrong in the future. By tracking expenses (easily done) you can build a great credit history for your business that will also reflect on you.
Your business credit card will probably have the option to give your employees extension credit cards. This an easy way to track employee expenses, especially if it's done in the name of the business. You can easily see if that business dinner was really a business dinner. It's also a great way to see how much money you are actually spending.
If you're savvy and careful about using your business credit card strictly for business, then you will have no problem using business credit cards. You'll be surprised that you've managed so long without them!
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A business credit card is obtained in much the same way as a consumer credit card is. They have a very similar application and approval process, you still get charged interest if you carry a balance, and they have an impact on a credit rating, but usually on the businesses', not the consumer's. These business cards can offer low interest rates, different rewards programs, online account access and services that support you, the business owner. Their credit limit is often higher than a consumer's credit card. Most businesses don't have a credit history on their own, so the owner's credit history is checked during the application process. So if you want a card for your company, make sure that you have fairly good personal credit. This means that you will be personally guaranteeing the company's credit line. A business credit card is an excellent tool for managing the expenses of your small business. They allow you to easily track the spending of business funds, and let you keep track of employee spending habits. Most credit cards for business offer quarterly and annual reports of your credit card charges. This really can assist you in seeing how much is spent on what category every year, helping you to formulate financial strategies. Business credit cards often times have rewards programs, very similar to what consumer credit cards offer. The main difference is that with the business cards you generally have rewards options that are tailored to then needs of the business or the entrepreneur. When it comes to managing expenses and helping grow your business, a business credit card is a great tool to have. You do need to find one that fits the needs of your business, giving your company maximum benefits. Because a business credit card is most effectively used as a financial tool to help your business be a success, you really have to make sure that they don't get abused. Used right, a business card can help your business grow and it can contribute to your financial success.
Both Miles Shyr & Caressa Waechter are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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