Business credit cards offer so many valuable offers and numerous tools that help them manage expenses easily. A business credit card is only available for business owners, and entrepreneurs. If you have a lot of cash in your bank account to launch your new startup, it will be compulsory for you to obtain a business credit card as it offers some key benefits. Using a business credit card helps you to manage your business and personal expenses separately.
These cards offer higher credit limits as compared to personal credit cards. It helps you to execute large transactions with ease for your company. These cards also allow you to issue employee cards under your business credit card with specific transaction limits. By adopting this way, you can easily monitor your employee’s transactions and ensure that they are executing transactions for business purposes only. It provides you with a comprehensive overview of your financial activities under your card.
Why Should You Choose a Business Credit Card Instead of a Personal Credit Card?
The most important and valuable reason for this is the separation of business and personal expenses. Getting a business credit card helps you to monitor the transactional activities of your business easily. These credit cards help you in managing your records, tax filing, and in achieving tax breaks.
It will be very harmful to you if you utilize your personal credit card for your business expenses. Personal credit cards have low credit limits as compared to business credit cards. Therefore, using your credit card for large business transactions results in exceeding the personal credit card limit. It will also result in losing your credit score. You will not be able to make personal purchases if your credit reports are exceeded due to the executions of business transactions. Some business rewards credit cards help business owners earn free rewards whenever they swipe for business expenses. In this way, they can save lots of bucks every month.
What to Consider While Choosing a Credit Card for Startup?
You must carefully examine the offerings of various business credit cards while choosing one for your business. These offers may vary depending on the card issuer. All business credit cards have equal value, but you need to consider these factors before choosing a business credit card for your business, whether these offerings suit your business best and are easily affordable for your business or not:
- Many credit card issuers charge annual fees, but you must determine if the annual fee is worth receiving rewards or if this fee is equal to the reward points you will receive in the future. These business cards provide a lot of benefits, but remember that the annual fee of these cards is more than $450.
- You need to consider carefully whether you will get a huge signup bonus as your business will execute more transactions than an individual. If they offer huge signup bonuses then consider applying for this business credit card.
- Consider finding the answer to this “Will you get more rewards from your numerous purchasing activities via your business credit card?” as many banks offer more than 50% cashback or reward points in each transaction to their business credit card owners.
- Business owners also need to analyze what are the offerings and other benefits of various banks for adopting a business credit card. Many businesses utilize various benefits, so it is important to determine your business’s type of offering to suit your business’s needs.
Benefits of Business Credit Cards
These cards are distributed by banks and other financial organizations under varying terms and conditions based on the financial condition of the business. There are so many benefits that banks provide to their business card owners. These benefits vary based on the card issuer and its services. The most important benefits of business cards are given below:
1. No Annual Fee
Some credit card issuers charge annual fees for their business card but there are so many standard companies that do not charge any annual fee for their credit card. They also provide some exciting offers timely. This is a great benefit for business owners as they do not need to pay a heavy amount for their credit card annually and helps them to reduce some of their business expenses.
2. Low Transaction Fee
Business owners may get caught while facing transaction fees, interest charges, cash balance fees, and more charges. It creates a lot of trouble for businesses as they have a tight budget for their financial operations and charging these additional fees may result in harming their financial management system. It is extremely important for business owners to carefully analyze the hidden charges while signing up for a business credit card. Some banks offer low transactions and other operational fees and that might be suitable for business owners to obtain their credit cards.
3. Robust Management Tools
Most credit card issuers provide a lot of management tools that are extremely beneficial for businesses to maintain their financial records and assist them during tax filing. These tools enable businesses to monitor their financial operations with robust management tools. Some management tools offer administrative access to business owners to manage their transactions easily via software or a mobile application. This is the most valuable benefit that a business owner can achieve.
4. Credit Reports
For every business, it is exceedingly difficult to maintain their financial records and operations. By obtaining a business credit card, you only need to execute transactions from your card and all the transaction records will be constructed from the card issuer’s side. Various card issuers provide these facilities to their businesses that assist them in maintaining their financial records and they can obtain a copy of all the transaction records anytime from a bank.
5. Employee Cards
Business credit cards provide business owners with ease in obtaining numerous credit cards under the main business card for their employees with a specific budget limit for each card. It facilitates owners as many owners are busy with their work and do not require their cards to execute a transaction. This will also help to maintain transaction records effectively. It eliminates the need for your card to purchase something. By using this feature, you can build your financial team that deals in purchasing and financial management operations.
Conclusion
Not all business credit cards fit your business best. It is necessary to conduct thorough research based on the offerings, rewards points, services, management tools, and annual fees of various organization’s business credit cards. There are so many benefits and drawbacks of business credit cards. You need to choose a business credit card carefully based on the numerous features and rewards that suit your business. Business credit cards provide various management tools to manage your financial activities rather than a personal credit card, but you need to be completely informed about their complete process.
