3 Important Things About Business Credit Cards
New businesses rarely get enough funding due to the fact that they are new. As a result, they mostly rely on external debt. Some get bank loans or get a business line of credit, and some put company expenses on personal as well as business credit cards. It is essential to growth and maybe even just survival for a small business to know what type of credit card to use for their business. It can help them when it comes to buying things that will benefit the business in the long run. You need to figure out what your business needs in order to work well and what you can afford. For example, if you know that your business needs something like this 20kg parcel scale, then you need to make sure that you can afford it, so getting that is essential to your business’s success. But how do you get the funding?
Below is my short list of 3 important things to know about business credit cards.
1. Some business credit cards don’t report business scores.
For a growing business it’s essential to have credit and grow credit too. This is also according to repair.credit, who state that credit cards are essentially contractual and must be treated as such. You start out with very low credit but as you run your business with a close eye on financials, bill payment and credit, you will eventually grow credit. More credit definitely helps in improving your product or service and even in expansion or hiring plans. You can click here to find companies that will help with your business credits. So, before signing up for that business credit card, make sure that your credit account activity will be reported to major business credit bureaus like D&B, FICO, SBSS, Equifax and Experian.
Quick Tip: It’s best to separate your business and personal credit account profiles. You don’t want to mix them both up. If your business goes south, you don’t want it to affect your personal credit life too.
Related: Best Ways to Accept Payments From Your Customers
2. Some cards offer free basic accounting features.
Some business credit cards offer accounting features. Some offer just the basic search and download transaction features but some others allow offer more advanced features like QuickBooks integration. With QB integration, you can easily monitor and track and tag different transactions. Expense reporting and purchase records help when year end and tax season is near. All you have to do is download your data and use it as you need to. Before you sign up for a business credit card, ask about their online account portal details. Ask what types of reporting is available and ask to see some sample reports if possible. Shop around and find what best suits your new business.
If you issue cards to your employees, these accounting features help you keep track of their spending. You can easily differentiate what was a business expense and what was personal. You can also add spending limits and alerts on employee cards.
Related: ACH, Paper Checks, eChecks, Electronic Payments! Confused Yet?
3. Spending reward points can help you lower some costs.
Some business credit cards automatically enroll you into their rewards programs. If not, be sure to enroll right from the start. Business credit card rewards have a better point system than personal ones. You get more reward points and it’s easier to accumulate bonus rewards too. You get get good discounts on hotels, car rentals, fuel and also discounts at networked partners. For example, you could get discounts or accumulate points at office supply stores that are included in the card issuers network. Buying gas could earn you a 5% discount.
Business credit cards issued to employees can also earn you, the main card holder, reward points. Whatever your employees spend on, their reward points accumulated into your main account. The more they spend, the more reward points you get. Rewards points accumulated over time can also be converted into coupons as well as cash.
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