Should Your Business Use a Credit Card? If so, How Do You Choose the Right One?
What you should know when choosing a business credit card
There are some major reasons why you should have a separate credit card for your business expenditures. For one thing, it gives you insight on the operating cost of your business, which should always be separate from your personal expenses. Having one also allows you to measure your company’s finances.
Additionally, during tax season, holding documentations of your business expenses can make tax filing uncomplicated. Having a business cc also allows you to build your business’ credit history which can be crucial for a small or startup business. Aside from that, there are several other perks for acquiring a business credit card.
Although possessing a business credit card may seem alluring, choosing the right business credit card is the answer to obtaining those great rewards and an easy way to keep track of your credit based finances.
Distinguishing the types of credit cards
Generally financial institutions and credit card providers offer a profusion of cc both for personal and business use. However, when looking for the right business cc, you will chance upon various spectrum of choices that can suit your requirements. To limit your search, you need to recognize the distinction between a charge card and a standard business credit card.
Charge cards commonly does not have a spending limit and has no interest rate; although, you need to pay the bill in full and on time. Like the standard credit card, this type of card also comes with an annual fee, but in return, you will be offered a wide range of perks like concierge services. This type of card is usually suitable for business owners who are confident that they will be able to come up with the monthly payments.
On the other hand, standard business cards are allotted with a spending limit. Usually card holders need to pay at least 1% of the balance including the monthly interest. This interest commonly applies to balances that are not paid in full. This is normally the better option for start-ups to small business owners.
Consider your business needs
Depending on your business needs, you need to evaluate which best suits the habits of your enterprise. Looking for one which has rewards on items which you commonly spend on will allow you to save money on your business costs. The reward points can usually be redeemed for a variety of items and will give you earned points for every transaction you make. Make sure that the rewards are not offset by the cost of having the credit card compared to other options.
Analyze cost and savings
It can be a favorable thing to analyze the outlay of getting a business cc, considering that you do not want your business’ expenditures to overtake the savings of acquiring a business credit card. You also have to determine that these fees do not invalidate the rewards your card contributes.
Getting a business credit card can be a big help to your business. First, you need to understand the basics and must know the requirements. When looking for the best credit card that fits your business needs, examine the advantages and disadvantages of every credit card against your business demands. This way you will make a better informed decision.
To learn more about financing your business needs with or without credit cards based assets, call us today at 866.988.6868
Study operational costs
Studying your business’ operational cost will allow you to choose which type of loyalty reward program best fits your business’s needs. An example would be if your business has a need for constant travel, you might take advantage of a credit card that offers a frequent flyer program.