When Should You Use Your Business Credit Card?
There are a number of reasons why you might want to use a business credit card. Perhaps the most obvious reason is that business credit cards, according to Forbes, offer certain benefits that personal credit cards don’t, such as higher credit limits, rewards for spending, and purchase protection.
Every business is different and will have its own unique needs and expenses. However, there are some general guidelines you can follow to help you decide when it is appropriate to use your business credit card.
Spread out the cost of a large purchase.
When it comes to business credit cards, one of the most common reasons to use them is when you are making a large purchase. This could be anything from office supplies to a new computer. By using your business credit card, you can spread out this significant business expense over a number of months and avoid having to pay for the entire thing up front.
Earn rewards for business travel.
If you’re traveling for work, using your business credit card can be a great way to cover your expenses. This can include things like hotel costs, airline tickets, and rental cars. And, if you rack up enough miles or points on your business credit card, you may be able to get a free or discounted trip.
Build your company’s credit history.
Using a business credit card can be a great way to build your company’s credit history. This can be important if you need to apply for a loan or line of credit in the future. Strong credit history can help you get approved for a loan and may also help you get a lower interest rate.
It’s important to remember that you should always keep track of your spending, so you don’t go overboard. But, if you use your business credit card responsibly, it can be a great way to save money and rack up rewards.
If you’re thinking about applying for a business credit card, be sure to compare your options. There are a variety of cards available, and each one has its own benefits and drawbacks.
Think about your spending needs.
What type of expenses do you typically charge to your business credit card? If you need a card that offers a high limit for cash advances or for making purchases online or overseas, look for a card with those features. If you travel a lot for work, you may want a card that offers travel rewards.
Consider the different benefits and rewards.
Some cards offer rewards in the form of cash back, while others offer points that can be redeemed for travel, merchandise, or gift cards. Others offer a mix of rewards and benefits, such as statement credits for expenses like travel and office supplies, or access to airport lounges.
Check your credit score.
Most business credit cards require good to excellent credit for approval. If you have a low credit score, you may want to consider a secured business credit card.
Look for a card with no annual fee.
Unless you plan to use the card’s benefits and rewards extensively, it’s best to choose a card with no annual fee.
Read the fine print.
Make sure you understand the terms and conditions of the card before you apply. For example, some cards have a foreign transaction fee for purchases made overseas, while others do not.
Do your research and find the card that’s right for your business. Then use it responsibly and make all of your payments on time. With a little effort, you can build a strong credit history for your company and reap the benefits your new card has to offer.