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Business credit cards offer a variety of useful benefits for all types of businesses, regardless of their size. From the larger corporation with thousands of employees in far flung satellite offices to the smaller, start-up venture, the benefits of business credit cards are numerous and definitely worth consideration. <!--[if !supportLineBreakNewLine]-->
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Here are just a few of the ways that a business credit card may help your business to thrive and operate more efficiently.
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Managing Finances
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Using business credit cards makes managing your expenses and keeping record of bookkeeping activities considerably easier. This is especially true for those who operate their own business from home and need a more accurate way of keeping expenses separate. Filing and paying taxes are also simplified with business credit card accounts, as detailed monthly, quarterly, or even yearly reports can be used to help eliminate or decrease accounting expenses.
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With most cards, detailed statements can be downloaded at anytime from the internet to be used in conjunction with various accounting software. Using a business credit card also makes ecommerce possible and simpler for both the business owner and the purchaser. International transactions are also conducted more quickly by credit card than by using a business checking account.
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Increasing Credit
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Paying the account's bill promptly and staying under the set credit limit not only avoids costly late or over-the-limit fees, but also helps increase one's overall credit rating. This, in turn, increases the likelihood that you'll be eligible for more credit should you plan on expanding your business.
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A business credit card account in good standing also makes being approved for a bank loan more likely, provided that there aren't too many open accounts and none are in arrears.
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Incentive and Reward Programs
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Cash back rewards and significant savings on items that purchased for daily operations are two of the most sought after types of incentive programs people look for in a business credit card.
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Other incentives include low introductory rates, 0% balance transfers from credit cards with higher interest rates, and monthly grace periods. The introductory and 0% transfer periods may vary from card to card, but are usually three months to a year. Instead of transferring accounts too often, simply ask if there are any lower rates you could take advantage of. Most companies will often lower rates to keep the business of customers whose accounts are in good standing.
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Business credit card reward programs may include "point" programs where a point is issued for every dollar spent using the account. The points accumulate and can be redeemed for various rebates, rewards, and discounts. Some companies pair up with other merchants, offering cross-discounts for purchases, as well as discounted hotel rates, even gas rebates, or travel miles.
Working Capital
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For start-up companies without enough cash on hand to begin operations, credit cards provide a way to purchase equipment, pay for advertising costs and other necessary expenses without applying for a bank loan. Cards that offer introductory periods of either zero percent interest, or low interest rates are especially beneficial for this type of company, as it allows time to repay money owed on the essentials the business needs to operate.
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