5 Reasons Business Credit Cards Make SenseJuly 20, 2011 - 8:31 am
If you are the owner of a small business and have not yet tried to apply for a credit card, there are some key benefits you need to consider. Credit cards for a business are a smart move because they are often the first foundation for a business’s own line of credit. Since most small businesses start on the financial reliance of the proprietor, a business credit card is a great way to finally separate the personal side of finances from the business side and create a solid business financial foundation.
Here are 4 more reasons why the business credit card is beneficial to small business owners:
Money Back Offers
Many of today’s business credit cards offer rewards programs which give the business actual cash back just for using the card. No one can deny that cash has its benefits and putting more money back into the business is a way to help ensure the business can grow. Cash back rewards can be significant depending on the terms and conditions of the business credit card you select. It pays to compare several card offers to find the one with the most suitable rewards.
Business Travel Discounts
In addition to cash back credit cards for business, there are other reward programs being offered to business customers. Airline and travel rewards can be highly beneficial for small businesses that need to go out on the road for business growth. With airline ticket rewards and travel discounts for being a card member, small businesses can save a lot of money doing what they need to do. Other card benefits include hotel discounts, preferred travel amenities, rental car discounts, as well as the purchase power necessary to get the job done.
Business credit cards offer a unique feature most personal credit cards do not. Employers can set limitations for spending on multiple cards to make it more convenient for other management personnel to make purchases. Employers have control over how the card is used and what charges are made based on their needs. This helps to control spending and is not something you can accomplish with cash or a bank debit card. It is also convenient for the other personnel since many businesses today do not accept company checks.
As a new small business, there is not a history of credit worthiness or vendor relations. It can be difficult for a cash-only business to get approval for purchase orders from vendors without having money upfront. Vendors want to know they are getting paid and until a business is proved to be financially reliable, it may be necessary to prepay for inventory. A business credit card will help to build up a good business financial reputation and at the same time, provide purchase power to get the inventory and equipment necessary to keep the business functional.
Business credit cards of today are very different from in the past. Many credit card providers have created small business cards that cater directly to the needs of a small business. The cards of today make more sense for the independent business owner or entrepreneur. It is a good investment of time to compare several credit card offers related to business before selecting the one best meeting the needs of the company as a whole as well as the expectations of the small business owner.