Pros and cons of business with credit cards

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cards for Business » Pros and cons of business with credit cards

Pros and cons of business with credit cards

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

There are several credit card companies that offer credit cards specifically to clients running their own small businesses. Business credit cards provide a lot of benefits to the card holders but there are some inherent problems associated with them as well. At the end of the day, it boils down to how these cards are used by the business owners.

Friendly payment schemes

Several credit card companies offer friendly payment schemes for the business credit cards. For example, if there is a massive expenditure you have to make for your business, you can separate it out from your outstanding balance. The card company helps you draft a separate payment plan for that debt while the rest of the card expenses can be normally taken care of by the card owner. This way, a single large expenditure will not affect your credit history and payments or attract penalties.

Add on cards

If you have a small business with a few employees, you can use the option of taking addon credit cards that you can give out to your employees. There are two benefits of doing so. Firstly, the expenses made by the employees will let you get additional reward points that can be redeemed through your card. Secondly you can use this as a mode of payment of salaries to your employees.

Special monthly expenditure reports

Business credit cards will provide you a chance to overview the overall income and expenditure related to your business through the elaborate monthly expenses report. This will give you a very good idea of where you have spent most of your money. This will also allow you to spot wastage and reduce your expenses over a period of time. This detailed monthly expenditure report can be a good way of auditing or tracking your income and expenditure. It makes things much easier for you compared to cash expenses which are always harder to track down.

Card debt and interest

The card debt that is available to you based on your credit limit can work both ways when you are doing business. The credit card can be used to make all payments, so that you need to transfer cash from your savings account after a month or sometimes even more time after the actual expense. However, there is always the risk of paying exorbitant interest rates, sometimes even more than the loan interests that banks charge.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!