Getting a business credit card is essential for every business, whether you’re a freelancer working solo or a huge corporation. Read on to find out why.
There are about 30 million small businesses scattered throughout the country right now. From small auto repair shops to huge retail corporations, these businesses come in many different sizes.
But one of the similarities that almost all of them share is that they utilize business credit cards on a regular basis. They’ve found that there are so many advantages that come along with putting a business credit card to good use.
Getting a business credit card is something you should consider doing for your company if you haven’t done it already. It’ll provide you with a freedom and a peace of mind that you don’t have today.
Take a look at several of the benefits that you’ll get from a business credit card.
Helps Keep Track of Your Spending
Staying organized when you’re running a small business can be a huge challenge. It can be difficult to keep track of how much money you’re bringing in as well as how much money you’re spending every month.
Getting a business credit card will solve the second half of this problem. While you’ll still have to take charge when it comes to keeping track of incoming money, your credit card will keep track of your spending.
You can get a much better idea of how much money you’re spending and what you’re spending it on. This will allow you to scale back in certain areas and to manage your money more effectively overall.
Makes Life Easier on You at Tax Time
There are some people who will attempt to use a personal credit card for business purposes. And this can end up being an absolute nightmare once tax season rolls around.
In order to file taxes for your business, you’ll need to go through each and every credit card statement from the previous year and separate your business expenses from your personal ones. This can be very time consuming and could lead to inaccuracies.
By getting a business credit card, you’ll avoid this scenario. You’ll make life easier on yourself and your accountant when you keep your personal and business expenses separate from the beginning.
Allows You to Get Access to Perks and Bonuses
If you use cash from your business checking account to make purchases on behalf of your company, you’re not going to receive any perks or bonuses along the way. But you will receive them when you use a business credit card.
There are business credit cards that offer cash back, free flights, and other perks for those companies that use them. According to Bonsai Finance, there are even some cards that will set you up with free bonus points right from the beginning.
You will, of course, want to make sure you pay off your business credit card every month to avoid interest fees that could essentially negate the points you’re earning. But as long as you do that, the bonus points you earn will be more than enough to convince you that getting a business credit card was the right move to make.
Builds Up Your Credit Score
Your personal credit score might be really high. But that doesn’t mean that your business credit score is automatically going to be high, too.
As a small business owner, you need to work hard to build up your business credit score over time. And getting your hands on a business credit card is a simple way for you to do it.
By making charges to your credit card and making payments on them in a timely fashion, you’ll slowly build your business credit score higher and higher. This will allow you to apply for business loans later and use your high credit score to your advantage.
Prevents You From Overdrawing From Your Checking Account
When you’re running a small business, there are likely going to be times when your checking account balance will get low. So low, in fact, that you might overdraw from your account and face penalties from your bank.
You can steer clear of encountering this kind of situation by relying on a business credit card to make payments instead of your checking account. You won’t ever have to worry about a check bouncing or your account getting overdrawn when you have a business credit card handy.
This will help you sleep better at night. It’ll also prevent you from having to explain to others why you missed making a payment to them.
Gives Your Business a More Professional Appearance
Your goal as a small business owner should be to do whatever it takes to make your company thrive. From producing great products to offering excellent customer service, you should take all the necessary steps to grow your business over time.
Getting a business credit card will play a big part in that. It’ll make your business look a lot more professional from the outside looking in when you whip out your card during a meeting with a client or use it to pay a vendor.
Your business credit card will allow you to build up your company’s reputation and establish you as a trusted name in your community. It’ll also make you feel a lot more official and motivate you to continue to do what needs to be done to move your business forward.
Getting a Business Credit Card Is a Good Idea
After getting a business credit card, you do need to make sure you use it responsibly. You don’t want to rack up a bunch of debt for your business without thinking about how you’re going to pay it off.
But that shouldn’t prove to be problematic for you. By coming up with a system for paying off your credit cards every month, you can keep your debt in check and enjoy the bonuses that come with your card.
Do you want to discover how to go about choosing the right credit card for your specific business? Take a look at our blog to see some tips for picking out the best credit card possible.