Credit Card For Business
How A Credit Card For Business
Can Help You
For many businesses and especially small enterprises, business
credit cards represent a great financial tool that can be the
life blood for their survival.
The essential difference between personal use credit card credit
and business credit, is that the latter is designed
for the needs of both small business owners and corporate
businesses.
Business cards are used solely to conduct the day-to-day
financial dealings of your enterprise. These credit cards offer
a degree of flexibility as regard credit limit; low APRs and some
other additional benefits that are available only to business
credit cardholders.
Benefits can include, meeting expenses, acquiring stock/making
purchases, quarterly/annual account summaries, your own
personalised business card, free additional cards for your
employee(s) etc., Other than the above, a credit card for business
purposes functions in much the same way as personal use credit
cards.
Your investment as a small business owner, means that you want
to ensure your business function as smoothly as possible. Yet,
your best laid plans won't always go accordingly. Unforeseen
business expenses or losses can wreak havoc with your
business finances if you don't have readily available funds to
manage the situation. It is at these times in particular when
a small business credit card can make all the difference to
the health of your business.
If you're thinking about financing some or all of your small
business related expenses, a credit card for business can
provide an excellent means of meeting business expenses as well
as a host of other benefits. Some of these include:
Expense Management
Cash Flow
Detailed Statements
Generous Business Credit Card Credit Limits
A Business Credit Card
Expense Management
A primary need for business owners that a business credit card
can fulfill is business expense accounting and management. It
goes without saying that this crucially entails a small business
maintaining appropriate records for the purpose of business
expense reporting and profitability analysis.
This is where your small business credit card statements can
provide you with a much needed solution to monitoring what you
are spending on; how you are spending; as well as helping to
simplify the taxation preparation process.
A Business Credit Card
And Cash Flow
If your business is likely to rely on consistent cash flow to
pay for supplies, a credit card can provide the means of
purchasing stock prior to invoicing customers. A credit card can positively extend your cash flow since money you
need to pay out does not have to come out of your business cash
account. You of course then have the option of clearing the
creditcard bill once you receive payment from your customers.
If your situation were to meet With the above scenario, a credit
card for business use with a
high credit limit would be an ideal choice - but only if you
plan on clearing the balance in full once the statement becomes
due. If however, your customers are unlikely to pay you in full
before your credit card bill is due, you might be better off
securing a low interest credit card that will ease the cost of
carrying a balance over the short-term.
Need A Credit Card For Business
That Offer Detailed Statements?
Making the right choice of a credit card for business use,
will help ensure the success of your business. One of the ways
in which a credit card for small business can help you achieve
this is by tracking all your business-related expenses.
Record keeping will form a major part of the day-to-day
management of your small business. Without a structured
approach to this aspect of your business, you're
likely to encounter significant difficulties, not to mention
losses from tax deductions you might otherwise miss out on.
In addition, it is a requirement of all business owners to log
every sale, purchase and the monies received during the course
of business. The statements for your credit card for business
will help you with orderly record keeping by providing you with
a detailed account of your business transactions as well as
helping you to monitor your monthly expenditure. In a nutshell,
a credit card for business use can make things a whole lot easier
when it comes to working out your tax liability payments.
Credit Limit On Small Business Cards
When it comes to credit limits on credit cards for business use,
there are basically two choices:
Pre-set limit business credit cards:
these types of small business credit cards will have a pre-
agreed credit limit up to which you can spend. In
general, these credit cards offer fairly generous amounts
and tend not to charge any annual credit card fees.
Pre-set limit business credit cards are ideal for small
businesses that operate mainly on a cash basis and will
use the card mostly for emergency purposes
No Pre-Set Limit Credit Card For Business:
offer greater flexibility, especially if your business
transaction activities are subject to sudden surges and you
might need additional funds for your business. Even where
some of these cards may carry an annual fee, it is worth
considering if the nature of your business require a card with
no set limit. In any event, an ideal choice of a credit
card for small business offer is, one with the lowest APR
and a moderate credit limit
Although credit limits on credit cards for business use do vary,
in general, a line of credit card credit can extend to $50,000 and
above. It is also worth noting that you may even be able to
secure a 0% interest card offer for up to a year with some
business credit cards.
Once you decide that your small business need its own credit
card, it is time to choose the best credit card for your business.
As with any credit card decision, there are a number of factors
to consider before you apply for a business
credit card.
Now that you know how small business credit cards can help you,
the next step is finding the best business credit
card that is right for your needs. Ultimately, your choice
of credit card for business use will be down to the nature and
function of your business.
The content on this site is purely for information purposes only
and is not intended to replace your seeking professional financial
advice.
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