If you are a small business owner, having a business credit card can come in handy at all times. You can cover your expenses including office supplies, utility bills, client dinners, and whatnot. Having a separate business credit card for your business can help you to maintain a strong cash flow. Moreover, it also allows you to separate personal and business expenses which means zero headaches while filing taxes.
Most business credit cards offer you benefits like travel perks, discounts on specific services, etc.
Business credit cards are different from personal credit cards and here are some points which make them different.
- Business credit cards give you higher spending limits. As a result, you get higher purchasing power for your business.
- You get rewards, and benefits, for specific business services.
- Business credit card usage affects your business credit score as well as your business owners’ credit score. But personal credit usage doesn’t affect business credit scores.
- Personal and business credit cards have different introductory offers.
- The interest rates for both business and personal credit cards vary from bank to bank. Also, it mainly depends upon the business owner’s creditworthiness.
With so many business credit cards available in the market, sometimes it becomes overwhelming to choose the correct one for your business. So here’s a guide to opting for the right business credit card.
Things To Consider While Choosing A Business Credit Card
Here is a list of things to consider while opting for a business credit card.
APR – Annual Percentage Rate
The interest rate you pay on your expenditures is a crucial factor to take into account when choosing a business credit card. To prevent interest, you should always try to pay off your credit card balance in full and avoid carrying a balance forward. However, it’s crucial to take into account APR if you intend to make significant purchases and are forced to carry forward your balance to avoid paying more interest. Hence it’s important to consider APR.
Joining Fees And Annual Fees
Some business credit cards charge joining and annual fees and while some don’t. But where there are better benefits and rewards, there are higher chances of the presence of fees. However, if you have a great credit score and a good relationship with the bank, they may cut you slack on joining and annual fees.
Added Benefits
Business credit cards offer unique benefits and rewards than those offered in personal credit cards. Here are some advantages from which you can benefit:
Travel benefits: You may earn discounts on flight tickets, or you might earn air miles or rewards that can be redeemed to gain cashback. There are also chances of you earning access to lounges, free checked bags, and in-flight food and drink credits.
Fuel discounts: If your business requires you to travel more, your fuel expense can make you gain some attractive rewards and cashback.
Rewards on utility bills for your business: If you pay utility bills including water bills, electricity bills, and use a business credit card for your office maintenance, you can avail huge rewards.
Discounts: You can also avail of an exclusive range of discounts on services or products you regularly use including cloud storage, etc.
Conclusion
Getting a business credit card for your business can certainly make your life easier by making timely purchases and earning some of it back. When choosing a business credit card for your business, consider the rewards and benefits of each one as well as the annual joining, and APR fees. And choose the ultimate one which offers benefits and features according to your spending style at a cost you are comfortable paying.
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