6 Reasons Getting A Credit Card Is The Right Move To Sustain Your Business’ Needs

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If you have a small business, whether as a sole proprietor or partner, it would be a good idea to strongly consider getting a business credit card. Getting a credit card for small businesses would be the ideal way to get quick funds if you do own a small business.

Before we get into a detailed discussion of the benefits of business credit cards, let’s first define why you actually need one. A business, any business, is established with the full intention of making money. No matter what the product is, regardless of whether you have nobler intentions, businesses are driven by the bottomline and the bottomline is to turn a profit. With this in mind, it does take money to make money, and not everybody has money. That’s where business credit cards come in.

If that’s not enough to convince you that getting a credit card for businesses isn’t just advisable, but downright logical, then here are six more reasons why your small business can only be helped by applying for a business credit card:

A Business Credit Card is Separate from your Personal Credit Card

Why is this a benefit? Because this helps you ensure your personal finances won’t suffer due to business expenses. Such a separation also means that it would be much easier for you to organise your personal expenses and your business expenses. This keeps bookkeeping clean and accurate, as well as organising your financial records faster and more efficient.

Having a separate business credit card from your personal financial account also gives your business a certain sense of legitimacy. Once your business has its own money and financial records, it stops being just a project and becomes a real business. While that may be merely a psychological comfort, it’s still a comfort.

A Business Credit Card helps you Track Spending

As mentioned above, having a business credit card helps you track how much you spend for your business. This also helps you track what your employees spend on business-related activities. This enhances your organisation, giving you a clear idea of how much money your business is putting out there and how much of your spending you can actually cut down on. Such tracking can only lead to streamlining your expenditures and eventually, you would be running a more cost-efficient organisation, thereby increasing profits and provides your business growth opportunities. All that, simply by properly monitoring your company’s spending.

6 Reasons Getting A Credit Card Is The Right Move To Sustain Your Business' Needs

A Business Credit Card usually has Higher Credit Limits

This is somewhat of an obvious benefit, but most people tend not to see the potential in this. Designed specifically to function as a credit card for an entire company, it would only make sense for business credit cards to have higher credit limits. Your business operations credit card needs to have a high credit limit to properly address all of your business’ financial needs. The potential that lies in this is that you can actually make bigger financial choices with a business credit card account. Purchasing equipment, or funding a mass team building trip, these are things your company can afford to do because of the higher credit limit the card usually offers.

Payment Terms can be Customised

Unlike a personal credit card that has monthly requirements, many issuers of credit cards for small businesses are more flexible when it comes to their payment terms. This is because cashflow in businesses tends to be unpredictable, especially for businesses that have seasonal peaks. Hence, business credit card issuers have more business-friendly payment schemes. These terms may vary depending on the institution issuing the cards, but there’s almost always a lot of wiggle room provided when it comes to payments.

A Business Credit Card also Offer Rewards

Like a personal credit card, a credit card for businesses also has perks and rewards. Almost all of the financial institutions that provide companies with a credit card have a rewards program that businesses can avail of, depending on their credit card usage. The most common of these rewards programs is the accumulation of points that can be used to redeem particular prizes. Keep in mind that considering a business credit card is used on a much bigger scale and (depending on the nature of the business) frequency, the rewards are going to be on that level as well.

Other Intangible benefits of the Card

Aside from the psychological personal benefit mentioned earlier in this article, there are also similarly intangible benefits that your company can get from having a business credit card—the biggest of which is that it raises your business’ credibility in the eyes of other businesses. Having your own card basically establishes your business as a serious competitor, and not just some flash-in-the-pan, dime-store operation.

It also allows your employees a certain sense of freedom and responsibility. Issuing a company credit card to employees is a sign of trust, which would also cultivate loyalty. It sends an unspoken message that says “I am entrusting you with the company’s resources simply because I know you’ll use these resources properly.” There are other benefits from this, and while those benefits are intangible, the positive impact would be undoubtedly felt.

If you’re a business owner, or planning to put up a business of your own soon, apply for a business credit card as soon as you can. The benefits outweigh the negatives, if there are any, and if used properly, the business credit card may become the tool that elevates your business to heights that you yourself may have never expected.