If you own a small business, you probably know the value of having flexibility, particularly when it comes to having the ability to spend on things you need to make your company grow and become more successful.
For this reason, many small business owners might benefit from having a credit card. But the question many may have is when the time is right to do so. For example, some small businesses may not have a strong enough credit history of their own and would therefore require the owner to take out a business card in their own name to better build the company’s standing.
Of course, this comes with a certain amount of responsibility that many small business owners may not be prepared for. Credit cards for business do not come with the same protection that consumer cards do, and as such, spending on it may lead to unforeseen issues, particularly if you are in the habit of carrying a balance from one month to the next. In addition, you need to keep careful track of which purchases you make on that card for your business and which you make for personal use, so for that reason, it’s better to use the card only for business purposes. But the advantage to that is that when tax time rolls around, you’ll be in a better position to prove which expenses you had for your company, and not yourself.
And when you decide it’s time for your business to take on a credit card of its own, you might want to distribute it to some of your trusted employees. Fortunately, many business card lenders now allow you to set up your account so that authorized users each have their own individual credit limit. Because business cards typically come with higher limits than consumer accounts, this can be especially important. Also, when your employees use their business cards, you won’t have to worry about issuing reimbursement checks.
Of course, you should also consider the effects a credit card would have on all aspects of your company’s finances before committing, and review a number of offers to find the one that works best for you as you attempt to grow your company.