In the era of running a successful business, every single advantage counts. From streamlining operations to maximizing profits, strategic decisions can make a huge difference. One often overlooked tool that offers several benefits is the business credit card. While debit and personal credit cards might seem enough for smaller purchases, a dedicated business credit card provides unique advantages.
In this article, I’ll share 6 reasons why you need a business credit card for your company to manage business expenses in the best way possible.
Business Credit Card Defined
Unlike personal credit cards, a business credit card is designed for commercial use only. Like a personal credit card, it offers a line of credit that enables businesses to make purchases and pay for other business expenses. Business credit cards also provide special benefits designed to meet the requirements of businesses, like expense tracking, spending limitations, rewards, and more.
Reasons to Get a Business Credit Card
Easy Financial Flexibility
Every company requires adequate financial support to sustain being it small or bigger company. Owning a business credit card will make it more convenient to keep proper track of your company’s expenses and credit score.
Also, with a credit card, you can easily purchase important things, equipment, and other relevant items since it is easy to get as compared to a loan or line of credit.
Cashback, Rewards and Points
Business credit cards offer a variety of perks and benefits that help brands save business money while managing their expenses. Some cards come with sign-up bonuses, cashback, travel rewards points, and more. Also, if you have a business credit card that offers travel credit, you can get a big discount on airline tickets or else in hotel accommodations.
High spending Limit
Many business credit cards provide high spending limits and larger credit, like up to $5000 than personal credit cards do. This helps businesses manage their monthly expenses and other costs even without getting a loan. That is why you must have a business credit card to make bulk purchases or payments without facing limit problems.
Keep Proper Track of Employee Expenses
You can easily figure out employee expenses on a company’s money through business credit cards and set spending limits for employee cardholders. How much they are spending on food, travel and other purchased items. Some credit card companies also allow cardholders to monitor their expenses through mobile apps. Businesses can also apply for employee cards so they can be used by authorized employees for business expenses and payments.
Easier and Organized Record Keeping
In addition to separating your personal and business expenses, having a business credit card also creates easier record keeping that, in return, will benefit one conducting massive company-related money transactions.
Most business cards can provide some online portal or app that will assist you with online tracking and filing your expenses. This kind of convenience will carry over once you start filing your taxes and/or applying for a bank loan, as a result of having well-organized records will save ample time.
Also, having the ability to access your business’s expenditure records can facilitate fast money transactions, and will even get the advantage of opportunities – like buying property and inventory much faster.
Purchase Protection
A business credit card with a higher spending limit might offer you larger purchases, whereas personal credit cards can frequently offer this kind of profit; still, business credit cards will cover more costly purchases.
Important Note
Many people think they need to have high amounts of income to qualify for a business credit card. However, this is not true. Even if it’s a few hundred dollars a month, you can still qualify for the credit card. It is a good habit to separate your business and private spending. So it’s completely legitimate to have a separate business credit card and account even if you’re not making a large amount of revenue or profit yet.
You don’t necessarily need a business checking or savings account, either. Well, that definitely helps. Even having personal accounts that show responsible credit use can also help. As I mentioned earlier, you can often offer some of your credit lines in order to get approved for new cards, and you can offer to have some of your personal credit transferred to your new business credit card, which can help with getting final approval.
Final Words
It is always wiser to call reconsideration lines when you don’t get approved personal cards. However, with business credit cards, I advise against it. So, the process for approval requires a lot of information and consideration; you’re generally better off waiting for a decision in the mail before contacting them. However, you get a denial or a request for more info, don’t give up, you can always ask to be reconsidered if asked by the issue or why you want a credit card. Just remember to be truthful and positive. Also, be prepared to answer how much your company is going to generate in the future. So, it might be helpful to have some numbers and figures in mind when speaking to the reconsideration line.
