FOCUS: What You Need to Know About Business Credit Cards

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Business owners’ needs are often distinctly different from consumers’ needs, which is why a business credit card can prove to be very beneficial. Instead of making all of your business purchases on your personal credit card, consider using a designated business credit card. Not only can a business credit card help protect your personal credit, it can help build your business credit and provide more opportunities for your business to grow.


Newbies to the world of business finance are strongly advised to observe this cardinal rule: Never mingle business commerce with private monies. That means you should have a credit card that is dedicated 100 percent to business use. Accurate financial management is critical to the success of any business, and blending accounts invites massive headaches, or worse, a tax return that is difficult or impossible to defend in an audit.

When a business has multiple users who need access to the account, corporate cards have an advantage. Depending on the credit card, the business can add and delete corporate users, set individual spending limits and easily track usage. Also, business credit cards often come with account-management software and mobile apps that few, if any, consumer cards offer. For example, some business credit cards allow users to instantly upload and tag the receipt from each purchase.

Good reporting tools are critical for accounting and tax purposes. Many great business credit cards allow you to download transaction data directly into your preferred accounting software.


Issuers might examine both your business and personal creditworthiness before approving you for a business credit card, but it’s important to establish standalone business credit to protect your personal finances as well as your business. Business credit expert Chris Bridges, who also runs Credit With Chris, told Forbes the benefits of separating personal and business credit have to do with liability, risk and growth. “When a business owner combines their personal and business credit to obtain financing, it increases their financial liability,” Bridges said. In other words, a business owner can be fully responsible for the debt the business incurs on the credit card, which can hurt the business owner’s personal credit.


Business credit cards typically offer sign-up bonuses, which are larger than those offered by consumer cards, and bonus points for business-related spending categories. Therefore, while a consumer credit card might award bonus points for grocery-store purchases, the business credit card might do so for office supplies, internet service and advertising. Other perks could include hotel discounts, airport-lounge access and more.


Business credit cards often come with higher credit limits than personal credit cards, allowing a small business access to the funds needed to operate and grow. Credit limits vary, based on the account holder’s credit standing.


Credit cards offer a line of defense in case something goes awry with the purchase. Purchase protection, extended warranty and price matching are just some of the credit-card safeties that don’t apply to cash purchases.

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