A lot of small businesses spring about every year, but a number of business owners still do not have at least one small business credit card. There are various reasons for this. First of all, businessmen fear that they may not be able to control the spending and mix personal expenses with official ones. They also think that it is complicated to apply for one under this new entity. Moreover, business owners also worry that finance and interest fees are higher, thus, will cost more. In some cases, they do not see the need because only a small number of purchases require plastic. In addition to that, owners feel more in control of the spending when checks are issued instead or things are paid for in cash. Finally, it is also possible that an application for small business credit card was once denied.
Even with these setbacks, business owners must also understand that having a small business credit card is beneficial.
1. Your business will be able to build its own credit. Handle a card well and you will soon reap the benefits. When your business credit is good enough, it will be possible to apply for loans.
2. It is less likely that your finances for personal and business will get mixed-up, in contrast to the common thought. With a separate credit card, you need not label every transaction in your personal check book and card statement every month.
3. In relation to number two, bookkeeping is made easier because you do not need to weed out and classify accounts. It will also be so much easier come tax season because itemized billing is already available.
4. You are able to get extension cards for your employees. The issuer will allow additional cards issued to some of your trusted employees. There will still be no problem with recording the transaction because all purchases charged to this account will be consolidated in one statement and are already classified per user/card number. This will make you see right away which cards are being abused.
5. There are freebies that are specifically tied to a small business credit card. The rewards programs usually let you earn points for items that are most fitting for you. For instance, some cards give discounts for office supplies, free travel miles, or discounted hotel rooms for those official trips.
It is true that there are certain disadvantages to getting a business its own card account. Just the same, there are also advantages that outweigh cons, so you should not stop yourself from applying for a business credit card.