The content is accurate at the time of publication and is subject to change.

Since the financial crisis, businessmen have turned to credit cards as their aid in building their business. This is because banks are more cautious in lending money for their expenses. With the way the economy flows right now, new businesses rarely become successful and many are still taking their chances. Banks do not want to take the chance anymore. It would risk their revenue. So, with this problem, business credit cards came about.

How is it different from personal credit cards?

Personal credit cards are taken out by a person for personal usage. The credit that it builds will be reflected on the person and whatever liabilities there are, it will be on that individual. Business credit cards can vary though. Some you can take out under the business` name and some would require a person to sign up for it or to guarantee it. From the time that it is still building credit, it will be reflected on the person and usually this is the business owner. If it has established its name as a business, then that is the time credit built will be reflected on the business itself.

I am the owner of my small business. I have used the business credit card for personal expenses. I will pay for it anyhow. Does that affect my business?

Yes it does. It is not a good idea to combine your personal expenses with business expenses because it will confuse you when you do your inventory. It is easier for you to take track of your business buying transactions with business credit cards since you will have a breakdown of the items that you purchased. If you have a personal item in there, it will require time and effort to remove them from the list instead of just logging the whole thing in the inventory. Plus, it will be difficult for you to build your business credit.

How important is building credit with business credit cards?

It is very important. Building business credit establishes the creditworthiness of your business. If you have done a superb job in paying your credit on time and conscientiously as a business, lenders and creditors will recognize your credibility as a borrower. You will be able to gain their trust so whenever you need additional funds for your business, they will not hesitate to lend you money.

Do business credit cards have rewards too?

Yes they do. Some of them can give you discounts on certain suppliers, on your phone bills and even when you go out in a business meeting in a restaurant.