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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