Advantages of Business Credit Cards

By Alban (Guest Post)

A standard credit card gives you the security and ease of use to access funds at anytime, anywhere, online, over the phone or in person, and while not all credit cards can be opened for business use, there is a wide range of business credit cards to choose from to keep your corporate spending documented, and give your business the same purchasing freedom you have come to rely on with your personal credit cards.

Benefits of Business Credit Cards

Don’t worry that your business is too small or doesn’t make enough purchases to warrant a business credit card, because there are so many different types of business credit cards available you are sure to find one to suit your business. So check out all the benefits your business can get from using a corporate credit card:

Keep your personal and business transactions separate. Whether your business is big or small, there will come a time you need to make a business purchase from your personal funds. Then there will be another time, and another and after a while you get tired of keeping track of the paperwork. Unfortunately, if you don’t track the paperwork surrounding your business purchases, then you could be missing out on business tax deductions, and paying for business expenses from your personal funds. Even if you are a small business owner or a sole trader, you can be so much more organized if you have one credit card statement on which you know all the purchases are for business. If you’re not working for a small business, explain this to your boss to convince him.

Make sure payments anywhere. Another reason you may end up absorbing business purchases is because your business currently makes payments using check or direct transfer, and this is not always convenient. However, with a business credit card you can make payments or purchases quickly and securely online, over the phone, by fax or in person.

Building a good business credit history.
Your business has a credit report just like you do and on it is information about its spending habits and credit history. Therefore, to build a strong credit report for your business start using a business credit card – responsibly. This builds your business’ credit history, to make commercial and business finance easier to obtain in the future.

Manage your money until your customers pay. Just like personal credit cards, a business credit card will have interest free days, also known as a grace period. This is the time when you can make business purchases and pay your bills to keep your creditors happy, while you wait for your customers to pay their bills. Rather than writing a check for a bill your business has to pay – which is then cashed and debited from your account in just a few days – you can often have between 30 and 55 interest free days on a business credit card, after which time you can deposit your customers’ payments on your credit card and pay it back to zero.

Fees and interest on a business credit card can be tax deductible. Because you are using your business credit card to make business purchases, the annual fee, any transaction fees and any interest charges can be entered into your tax return as deductibles. All you have to do is file the appropriate forms, and your accountant can tell you how to do that for your specific business.

How to Compare Business Credit Cards

You need to make comparisons of business credit cards in relation to the specific needs of your business, but following are some of the most important features you will need to look for on a business credit card, and how to compare business credit cards based on the features you need:

The interest rate