Should You Apply For A Business Credit Card Account?


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Should You Apply For A Business Credit Card Account?

Updated: September 28, 2018

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

Business-branded credit cards can provide many benefits to you as a small business owner if used prudently and managed carefully. Here are some advantages:

Keep Your Expenses Separate

If you combine your personal and business transactions onto a single non-business credit card, you are running the risk of inadvertently creating money management problems as well as creating potential tax issues. If you apply for a credit card in the name of your small business you are demonstrating your level of seriousness and dedication to your company, not only to yourself but also to the IRS.

Better Management of Employee Spending

If you have other people working for you, opening up a business credit card account will give you the ability to distribute cards amongst your employees that have preset spending limits to control expenditures. You will also be able to look over their charges on the separate statements you will receive.

Simple Expense Itemization

At the end of the year, the task of tracking all business-related expenses can prove nightmarish for small business owners that do not have a separate business credit card. Combing through multiple file folders stuffed full of receipts is a daunting task at best. There are many credit card companies that issue business credit cards what will provide a breakdown of expenses at year`s end for you, categorizing and itemizing all of your expenses and listing them on a single statement.

Rewards Programs Geared Towards Your Business

There are now many business-specific reward programs and spending incentives out there designed exclusively to provide perks for small business owners. These range in scope from travel rewards to discounts on office supplies to advertising credits, so shop around to find a business credit card that offers you perks well-suited to your needs.

Establish Credit For Your Business

Last but definitely not least, having a business credit card will enable you to build business credit for your recently established business. This credit will definitely come in handy in the future as your business expands and you are faced with the challenge of coming up with capital in the form of loans or additional lines of credit.

One thing to keep in mind is that since the implementation of legislation stemming from the CARD Act, business credit card accounts are not afforded all of the same protections federal law has extended to personal credit card accounts. For example, there is a CARD rule in place that prevents credit card companies from jacking up the APR on any existing debt on personal lines of credit without the account being more than sixty days delinquent. Not such rule exists for business lines of credit.

However, many credit card issuing companies have taken it upon themselves to extend some or all of the CARD Act consumer protections to their business credit card holders, so do some research to find the credit card issuer who will afford you the greatest amount of protection.

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.
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