Benefits of using a Business Credit Card Essay
Benefits of using a Business Credit Card, 490 words essay example
Benefits of using a Business Credit Card
Most owners of a small to mediumsized business use credit cards in their business. The major issue however is that the most of these owners make the mistake of using their personal credit cards. There are a few significant problems with this
First, by using your personal credit card for your business, you are blurring the line between your personal and business finances. The more the separation between your personal finances and your business finances, the better. Therefore it is advisable to have a credit card in your business name.
Secondly, you are putting your personal credit at risk if you are using your personal credit card for your business. Because the debt which belongs to a business, should be on the business credit.
Many individuals don't think that this is a major issue until they run into problems and realize that they no longer have any personal credit to back them up.
Following are some key benefits of using a business credit card in a business
Streamline Operations and Automate Expense Tracking
With a business credit card, paying expenses is a lot easier to manage with a business credit card instead of personal credit card, and monthly or annually generated reports are also helpful in analyzing and categorizing expenses in many cases.
Gaining Business Rewards
If you have a considerable amount of monthly expenses for your business that can be paid using rewards card, you can easily get up to $1000 or more per year in cash rewards, or even get free airline tickets by using a travel rewards card.
Managing Employee Spending
You can set up your business card to have spending limits for your employees. Which is very helpful in managing expenses for business employees. It can also help you notice any hidden charges you are unaware of.
Building Business Credit
You can build a positive credit for your business if you use your business card regularly. It will prove very helpful in the future when you have to build a new office or a new branch of the business.
It is clear from the above mentioned benefits that using a business credit card is very helpful in many aspects of the business.
You dont always need to use an explicit business credit card for all your business expenses. You can also use your personal credit card if you need, as long as you put company charges on it. But keep in mind that you wont be able to get the same rewards as you will get from using a business credit card, and you will also have a smaller spending limit to deal with. If its ok with you, then go for it.
Business credit cards should not be scary to you. Instead, you should see those as exciting new opportunities to expand the legacy of your business. You will get a lot out of these business credit cards if you manage your money wisely.