Having a business credit card can be a great way to boost your company's credit rating, keep business and personal finances separate, and gain access to increased funding and better conditions. Like personal credit cards, business cards provide numerous protections for travel and shopping, such as foreign transaction fees, cell phone protection, purchase protection and extended warranty, trip cancellation or interruption insurance, and collision waivers for car rental damage. It's much easier to carry a business credit card in your wallet than to rely on having a large amount of cash or your checkbook when a purchase is needed. A credit card is especially convenient for online shopping, and with the trend towards a cashless economy, it may be the only way to pay for certain goods and services.
With most cards, you have the ability to dispute any incorrect account charges and avoid making the payment until the dispute is resolved. Many credit cards offer some form of purchase protection in the event that the goods you buy are lost, stolen or not delivered. This can be especially helpful for new business owners who are operating on a tight budget. A business credit card can allow them to make major purchases even if they are temporarily short of funds.
This can match their cash flow, making their business less subject to ups and downs in the short term. The process of obtaining a business credit card is often faster and less complicated than getting a formal small business loan, especially if you don't have major collateral which is often required by banks and other lenders for a traditional loan or business line of credit. Many cards provide a breakdown of expenses by category, such as hotels, meals, office supplies, etc., which can be useful in case you are undergoing a tax audit. Keeping personal expenses separate from business expenses is also important; having a separate business-only credit card keeps accounting tidy and can protect your personal assets by not mixing them with those of the company.
Many business credit cards offer the same, if not better, rewards compared to their personal counterparts, so you can rack up extra points, miles, or cash back on the types of purchases you need to make anyway. Business credit cards often have better terms than personal credit cards, including higher credit limits and the ability to extend the billing cycle. In addition to additional points or miles, some business credit cards include a low or 0% APR on purchases or balance transfers for a period after the account is opened. Many issuers offer some form of transaction or expense management on business credit cards to help you stay organized, and some even offer free employee cards which can help you accumulate rewards even faster.
When looking for a business credit card it's important to consider all of your options carefully. To maintain good accounting practices it's best to limit yourself to two or three cards at most. All Capital One commercial credit cards do not offer foreign transaction fees, collision waivers for car rental damages, travel and emergency assistance services, purchase security and extended warranty protection. Depending on the card issuer you may be able to complete a paper application and mail it to the credit card company; look for one with no annual fee or one with a 0% introductory APR to cover some of your business expenses when cash is low.
Having a business credit card can be an invaluable tool for any company; it can help boost your company's credit rating, keep business and personal finances separate, gain access to increased funding and better conditions, provide numerous protections for travel and shopping, make online shopping easier and more secure, match cash flow during tight times, provide expense breakdowns for tax audits, accumulate rewards faster with employee cards, and offer better terms than personal credit cards.