How is a Business Credit Card Useful?

By: Peter Kenny

Business credit cards can be very useful tools for small business owners during startups, emergencies, travel,or even in the everyday running of a company. While business credit cards work very similarly to personal credit cards, there are several important benefits of using a card specifically tailored for small businesses for work related expenses instead of a small company owner using a personal credit card or an alternate payment option. Several of these important benefits include:

Increased Credibility - Business credit cards can make a small storefront or online company seem more established and therefore more legitimate than other methods of payment. Using these specialized cards can also contribute to a positive credit rating which, when used wisely, can build future trust in the company.

Convenience - If money is needed immediately, such as in a work-related emergency, last minute travel, or unexpected expenses, a business credit card can be very convenient if cash isn't readily available. It is often difficult for new companies to obtain a business line of credit, so having a specialized credit card on hand can be very helpful.

Book-Keeping - When these cards are used for company purchases, the credit card issuer automatically keeps a record of all transactions. These records are then sent to the owner in a monthly statement. This is especially useful during travel or when entertaining potential clients. These are situations when the business owner's focus might not be on recording all expenses as is necessary.

Time Saving - Just like with personal credit cards, company credit cards allow a business owner additional time to pay for expenses incurred rather than paying in full all at once, making them ideal for large purchases.

Security - Just as with personal credit cards, business credit cards offer some protection on purchases by an owner, where other forms of payment such as cash would not offer the same protection. This can come in handy if the company owner received defective purchases but was not able obtain a usual refund from the supplier, or if there were problems with travel arrangements while on a business related trip.

Additional Perks - Business cards can offer similar advantages as personal cards, such as cash back rebates or frequent flyer miles which often are very handy for frequent travelers.

In short, business cards offer all the benefits of a personal card, with some additional benefits that a company owner would appreciate. It is recommended that owners keep at least one business credit card account on hand for the reasons stated above.

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