Small Business Credit Card - Keeping Business and Personal Separate

It can be a challenge for small businesses to acquire the proper funds they need to set up shop and/or to keep it running smoothly. It is also difficult to keep business and personal accounts separate and to build business credit. As a new business owner, a small business credit card might be just the thing you need. If you have an established business, than a business credit card may be a convenient way for you to manage your cash flow or provide emergency funds when your money gets tight.

Personal Liability For Corporate Spending

Lenders are not quick to give lines of credit or business credit cards to new start-ups and small business that do not have an established business credit history. Banks use your personal history when considering you (and your business) for credit. You will be personally liable for all spending using your business credit card and reports will be made by the three consumer credit agencies (Equifax, Experian and Transunion), rather than business credit agencies.

Having your business credit card accounts linked to your personal accounts isn't the best situation. Large lines of credit for your business may make your personal financial situation appear worse than it really is. If you're late on a payment or default on a business account this could damage your personal credit history too. Less than good credit can affect your purchasing power and increase your interest rates. You lose options and money. The bottom-line - use a business credit card wisely and keep a clean credit report.

Shopping Around For The Best Credit Offers

If you already started looking around for small business credit cards, you know there are hundreds of cards to choose. From zero percent introductory rates and no annual fees to frequent flier credits and cash back rewards. How can you possibly know which one to choose?

The great thing about small business credit cards is that they offer a few more perks that cater to the needs of business owners, as compared to personal credit cards. Low APRs... large credit lines... grace periods beyond 30 days... frequent flier programs... no fee employee credit cards... Take time to shop around. Depending on your spending requirements and business needs, you can find a business credit card that works best for you.

Building Your Credit

Once you've opened up a new business credit card, use it to make purchases on a regular basis and pay off your balances each month. Pay close attention to your personal credit report, ensuring that it stays free of errors, late pays and delinquencies.

After two to five years, you can request that your business accounts be separated from your person accounts. If you can prove that your business is viable and your personal credit history is squeaky clean, then most banks and business credit card issuers will remove the personal liability clause. All business's financials will be reported exclusively to business credit agencies and your business spending will no longer be linked to your personal accounts.

Although small business credit cards aren't considered capital, they can be a tremendous help in the running of your business. In tough times just starting out, it can also add a sense of security. Establishing business credit is difficult but with a little basic knowledge business owners can enjoy many benefits of financial freedom. From making purchases online or cashing in on those frequent flier miles, you can effectively manage your cash flow and even save money with small business credit cards.

Small Business Credit Card – Benefits Business Owners

If you own a small business, you might just have significant monthly expenses that are required in its operation. But in many cases you may not yet have sufficient cash on hand to pay for those expenses. For those reasons, a business credit card or a small business credit card can come in handy, given the benefits offered for business owners in particular. It is a temptation indeed to spend more than one should with a credit card. This lack of control, however, is the primary source of the profits in the credit card industry. If you have the financial insight to manage your money as a business owner, business credit cards could give you the flexibility you need to manage day to day expenses. Business credit cards used with care could be just the thing you need to help you manage your growing business.

One difference between personal and business credit cards is the operation of purchase tracking. Your purchases are tracked under your company name, not your name, and so the marketing offers that you receive for your business would be based on what you have purchased with your business credit cards, not your personal cards. A benefit of this tracking would be that your company would have a business history which may prove to be a great asset.

Another difference is the way expenses are tracked. Your business credit card statement should come with a detailed list of transactions, broken down by type of expense. When you are arranging your monthly budgeting, or your yearly or quarterly financial projections for tax payments, these statements would come in handy when figuring out which expenses should be charged to which accounts, and which expenses are tax-deductible. This will be of significant use when you are managing your money, because you can trace individual transactions, and assign them to various parts of your budget.

Almost 75% of business experts surveyed have asserted that business credit cards and small business credit cards prove to be an easier way to manage expenses than a checking account. Checking accounts require the manual recording of transactions, and when people make mistakes or even forget to record those transactions, unpleasant surprises can turn up in the form of overdrafts. Your monthly statement will include every expense in detail.

Business credit card accounts also have some fringe benefits that personal credit cards do not always have. Your account should include extra cards, if necessary, for additional (trusted) employees, and it may even include travel insurance, both for travel cancellations, and even for accidents that happen to your employees (or to you!) while on business travel. These extra cards will really come in handy once your business starts to grow. If you are the primary decision maker, you often have several crucial decisions to make at once, and you are often involved in many elements of your business at one time. If you have purchases that are routine, having other employees who are authorized to make those purchases will free up a lot of your spare time. Since your business credit card would come with detailed expense tracking, you would feel the comfort of delegating these sorts of purchase decisions to others, leaving you more time to focus on growing your business.

As we progress into the information age, these detailed statements are now available online for your use in the comfort of your own office or home. Using the right accounting software, you could merge your online statements with your existing account files to automatically match expenses with budgeted accounts. Why pay an accountant to sit and match those expenses up when you can use a software package would do the same job at half the time and cost probably a lot less than the salary of an accountant? All you need to do is monitor the online merge process periodically.

And so we see how simple it can be for any small business to streamline its financial operations overnight. A small business credit card could end up being not just a source of financial flexibility, but also a surrogate accountant. Why not let the credit card company cover the overhead associated with tracking and sorting financial expenses? When you figure in the other benefits of a business credit card, such as bonus frequent flyer miles for airlines, or from rewards that come with cash rebates for purchases, the advantages of business credit cards begin to standout substantially. These benefits are available to any small business owner. The key is to remember to pay your balance and your fees in a timely manner, so that your credit rating as a business remains strong.

Business Credit Cards - Providing Advantages for Small Business

Personal credit cards are the most carried credit cards found today. But the benefits of business credit cards are largely misunderstood by the general public. The advantages of a business credit card are numerous and can include access to car insurance, free travel, higher credit limits and much, much more. Another advantage of some business credit cards is that they will allow you to keep your personal and business expenditures separate while simultaneously enjoying the benefits of the corresponding reward programs.

Small businesses, in particular, have discovered that maintaining a company credit card can help in expensing daily purchase items very easily. With the advent of the Internet, applying for a business credit card, whether you are a small business owner or an employee of a large corporation, is very easy.

There are a number of advantages that are found in business credit cards today that often times personal credit cards will not offer.

Business credit cards offer additional benefits that include expense management reporting that small businesses in particular find very useful. When comparing business credit cards side by side, several of the very best cards allow cardholders to create customized reports with online expense managment tools. This gives business owners the ability to login to their accounts at any time to review and download expense activity anywhere that Internet access is available. You can view recent account activity, pay your bill online, check on reward points, and even receive account alerts by e-mail, cell phone, PDA or pager notification. Accounts can be setup to pay expenses and ongoing bills automatically with a commonly used Bill-Pay option offered by a few of the leading card issuing companies. Several card offers also feature the ability to download and integrate card statement information directly into QuickBooks, a commonly used accounting program for small business owners. If cardholders ever need to dispute a questionable charge, it can be done online or over the phone with no paperwork. Lastly, many business credit cards offer the ability to access credit lines from their existing account that provides significant financing flexibility for short-term cash requirements that will not require collateral as would a traditional bank loan.

In addition to this, many small business credit cards also offer significant reward programs that include cash back rebates, office supply and merchant discounts and air & travel rewards.

Applying for a business credit card can be done in 3 easy steps. First, applicants should take the time to search and compare the variety of business credit cards online utilizing the Internet where consumers can find a vast array of resource and comparison sites to aid in the selection process. After thoroughly comparing offers and selecting a card based on your specific criteria, cardholders can simply and easily apply for the selected credit card by filling out an online credit card application. Credit card issuers offer a safe and secure environment for cardholders applying online, which also allows cardholders to expedite the application process without any significant delays.