Now that you have started your own small business, you probably think that you’ve made it. And in a way, you did! Good for you for beginning your journey into the business world. But believe it or not, you still have a long way to go. Better pick a business credit card first.
“But wait, aren’t credit cards for personal use only?” Business credit cards do exist to help business owners like you in managing your business. Here are some reasons why you should get one for your fledgling startup and some business credit card tips for good measure.
Keep Track of Business Expenses
Were you planning to use your personal credit card for all your business needs? That’s not an advisable strategy. As much as possible, separate your personal and business expenses. Your future self will thank you eventually.
Besides, you don’t want to max your personal credit card because you keep using it for business purposes. It’s best to just apply for a business credit card strictly for your business and establish a proper balance between your personal and entrepreneurial life.
Better Manage Employee Expenses
Here’s another reason to get a business credit card: so you don’t have to give your personal credit card to your employees. What if you need to buy something from the store but you can’t do it yourself? Never give your credit card to anyone else, family or friends.
And more importantly, don’t let your employees access your finances. Instead, get a business credit card that you and your employees can use for business purposes. So no matter who uses the card, the expenses are still streamlined and easy to trace in audits.
Avail Business-Related Rewards
Just like regular credit cards, business credit cards are packed with business-related rewards. From simpler payment and reimbursement options to providing better cash flow for your company, the benefits of business credit cards are nothing to scoff at. The higher credit limit can also make a difference.
Banks have various reward programs that will complement a wide range of businesses. Compare your options carefully and pick the right business credit card for your company. Try looking for a credit card with low annual fees or better expense management features. Lower cash advance fees won’t hurt, too.
Tips on How to Use Your Business Credit Card
Establish Internal Credit Card Policy
Once you have your business credit card, set up a policy on how everyone should use it. This is to hold everyone in the company accountable for every credit purchase. The policy should state who is allowed to use the card, who is in charge of recording the expenses, and who is in charge of paying the balance every month.
Your policy should also include spending limits and ways to settle any dispute. Don’t forget to include protocols in reporting credit card fraud or misuse. A good business credit card policy should reflect your startup’s values, so make sure to cover all possible grounds.
Build a Good Credit History
Just like with your personal credit card, you should also strive to build a good credit history with your business credit card. After all, it’s not just you who will benefit from being a responsible card owner. A good credit history will reflect well on your business as a whole.
And it will eventually pay off when you plan to grow or expand your startup. Applying for loans and requesting credit limit increases will certainly be a lot easier, thanks to your strengthened relationship with your credit card provider. Basically, just spend responsibly, pay on time, and try not to max your credit card on a regular basis.
Don’t Let Benefits Go to Waste
Imagine the rewards you’re getting with your personal credit card and how convenient they are. Now imagine these conveniences applied to your business. And it’s not just discounts and promo deals. We’re talking fuel rebates, cash rebates, and air miles, among others.
Most reward programs even provide services that are detrimental to your startup’s operation. Credit card rewards will always benefit you in one way or another. So study your business credit card’s terms and conditions and take advantage of its useful benefits.
Consider a business credit card a crucial part of your success. In the right hands, it can help bring out the potential of your startup and translate it to profit and growth. In the wrong hands, it can destroy all the hard work and leave everyone involved with a mountain of debt.
So it’s important to choose the right business credit card. Always research your options and compare the credit card feature your business will need the most. Use an online comparison website to make this task easier. Who knows, you might find a credit card you’ll want to keep for yourself.
