The Business Credit Card: Five Things You Need To Know
Too many business owners think they can run their business
by charging business expenses on their own personal credit
cards rather than using a business credit card. If you're
one of them, you may want to rethink that policy.
Using a personal credit card for business purposes can turn
into quite the disaster. Fortunately, by understanding the
five following business credit card facts, you can avoid
the common business credit card pitfalls.
1. You've Got To Keep It Separated
If you run a business and keep charging your business
purchases to your personal card rather than a business
credit card, things are going to get messy. And sooner or
later, you're going to mess something up. Because keeping
proper business records is critical to the success of your
business, you should avoid using your personal credit cards
for your business needs.
2. Don't Pay More Than You Have To
Some business owners assume that a business credit card
will carry a higher interest rate than a personal credit
card. Don't fall for the myth. It's just not the case. Just
like the personal credit card market, the business credit
card market is filled with competition,and getting a great
interest rate is just a matter of shopping around
3. Take All You Can Get
Having a business credit card isn't just good for financing
business purchases; a business credit card can also help
you out with some additional business-related perks. Many
business credit cards allow you additional cards for
employees, automatic insurance protection on purchases you
make with your business credit card and rewards programs
(minus the high interest rate usually associated with
rewards cards).
4. Your Business Needs a Credit History
No matter how you may feel, you and your business are two
separate entities. Just like you need your own credit
history, your business needs to establish its own credit
history as well. One of the best ways to do this is with a
business credit card. By obtaining and using a business
credit card, you will begin the essential process of
building your business's creditworthiness and paving the
way for future business credit opportunities.
5. Be Prepared to Guarantee It
If your business has never had a business credit card
before, you'll probably need to guarantee your business
credit card personally. Think of it as co-signing for your
business. When you do this, not only are you building your
business's credit history, but you are also adding on to
your own personal credit report at the same time.
Now Is The Time
So whether you are starting a brand-spanking new business
or you have been running a business without a business
credit card for a while, now is the time to get the ball
rolling and apply for the business credit card that will
best serve the needs of your business. There's no time like
the present to put a business credit card to work for you.
