Managing Finances Made Easy

Business credit cards are primarily advantageous because it enables a business owner to draw the line between business and personal expenses. A business credit card can be exclusively used for business expenses only while all other personal expenses can be charged to a personal credit card. Why is this important?

Some entrepreneurs may say that it really makes no difference whether you use a business or a personal credit card. Nevertheless, as you incur larger expenses and as your business grows, having a business credit card to handle your business bills can prove to be indispensable.

Business credit card issuers send monthly and yearly account summary reports to help their cardholders keep track of their spending. Most issuers also provide account reports that can be downloaded from the internet and used alongside accounting software like Quickbooks. This way, a business owner can simply use the reports as reference when doing accounting and bookkeeping tasks.

This is especially true when tax season arrives and you need to file your business taxes. Keep in mind that as a small business, you are entitled to certain tax privileges or deductions. By having separate personal and business accounts, identifying which of your purchases or bills are tax deductible becomes automatic and keeping certainly makes the job a much easier task.

Business Credit Cards and Rewards

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Another great thing about business credit cards are the different reward programs that are exclusively offered to business owners. The programs may vary from Cash Back to Gas Rebates to Frequent Flyer Miles and other special types of rewards. Thus, by using your business credit card to purchase stocks or to pay bills, an entrepreneur also gets the opportunity to earn bonuses and special privileges.

Last but not the least, credit cards for small businesses are great tools in establishing and building business credit. Once approved for business credit card, you can begin building corporate credit history as a preparation for your future plans. By using your business credit card regularly and submitting payments on time, building excellent business credit should be uncomplicated.

Business Credit Card Benefits

Indispensable for emergency expenses. When budget is tight and you need to make a purchase or pay a bill in a hurry, a business credit card can come in handy. Charging expenses to your credit card account will gives you the chance to get the cash you need on time without compromising the project at hand.

Build up your business credit. You can build up a solid business credit history by using your credit card regularly and being consistent with your payments. As your company grows, an impressive business credit score will surely win you easy approval and the best deals from lenders.

Track your expenses more easily. Monitoring your company’s expenses will be easier by using your credit card bills and yearly account summary. Most Issuers also provide an online account access feature and downloadable reports so you can use them along with your accounting software.

Access to online banking. Make purchases or pay your bills on time through online banking. For entrepreneurs with a hectic schedule, such an option is truly indispensable.

Make the Right Credit Card Choice

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How do you decided which business credit card is right for you? Remember that business owners have varying needs so there is not one credit card that will suit all types of businesses. As the owner of a small business, determine your priorities and find a credit card that matches with your spending style.

There are credit cards for business that offer a variety of reward programs. There are also business credit cards for business owners who need to rebuild or establish their credit. A secured credit card is great tool to establish corporate.

Check out credit card review websites so you can see the different kinds of business credit cards available in the market. Compare the rates and the costs. Examine each card more closely by reading the complete Terms and Conditions. By doing these steps, you can surely find a credit card that is best suited for your type of business.

One example of a specific business credit card is the Chase Contractor Visa business card. This business credit card specifically rewards entrepreneurs who are yet to build a structure for their business. Hence, the Chase Contractor Visa business card holder has the opportunity to earn incentives by spending at least $1,000 or more on construction material purchases. And since there is no pre-determined spending limit, you can use your card according to the financial demands of your construction project.

This particular reward credit card for business is ideal for contractors and business owners in the construction industry. However, before signing up, consider the possible drawbacks of owning this type of credit card.

Possible Drawbacks of Contractors’ Credit Cards

Different issuers have specific rules and regulations when it comes to implementing reward programs. Business credit cards that are designed for contractors were made to match the business owner’s spending style. However, you still need to make sure that you can get the most benefit by choosing a card that has partnerships with your preferred merchants or suppliers.

It is crucial to understand the exact rules of the program. For instance, what kinds of purchases are eligible for points? Take note that some reward credit cards will only award you with point if the purchase you made was from a participating merchant.

What about limits or restrictions with the use of your card? Is there a maximum value of rewards that you can earn? The Chase Contractor Visa Business credit card offers a maximum limit of 20,000 points per month. This means, you will not be getting more than 20,000 points even if your purchases exceed that amount for the month.

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Other important factors that you should be aware of are the penalties and fees associated with your card. Is there an annual fee that you need to pay to keep your account active? Will you lose your points and get penalized if you exceed your credit line? What happens if you fail to submit your payment on time? Will you be disqualified from redeeming the points you earned?

The only way to be sure about the conditions of a business credit card is to analyze your contract. Consider each and every statement stipulated in the Agreement and make sure that the terms complement your needs and spending style as a business owner.

Business Credit Cards – The Snares to Avoid

Overspending. Even personal credit card holders are warned against the uncontrolled use of credit cards. If you are an entrepreneur, you can also fall into the trap of overspending if you will not pay close attention to how your credit card is used.

For instance, a lot of business owners use their business credit cards for personal expenses without thinking about the consequences. Charging your personal purchases to your business credit card puts you at a greater risk of bad debt. As your charges build up, it may become difficult for you to pay off your full balance. You may have to carry over some unpaid charges for the next billing period. Consequently, that means paying the additional interest rate fees and losing control over your business finances.

Maximizing your business credit. Just as it is important to keep your credit usage low with your personal credit card, the same principle applies with the use of small business credit cards. Ideally, you want to keep at least 50% to 60% of your credit line free from charges.

There have been instances when a new business owner maxes out on his/her credit card for business financing. The purchase of equipment and supplies were all charge to the business credit card. However, the real problem appears when it’s time for repayment. For a newly established business, it could at least a few months before profits can really be utilized for debt repayment. Maximizing credit poses the risk of bad debt.

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You may find it extremely difficult to pay off your outstanding balances on your business credit card accounts due to insufficient budget. Your initial profit may not be enough to cover for all your bills and debt repayment. You may be forced to carry over your balances from one month to the next, submitting only the minimum due payment, as your debts accumulate due to the high interest rate fees.

Even worse, using your credit line to the fullest sends a negative impression to lenders who may inquire about your report. Your personal credit score and your business credit score can also be badly affected. Clearly, to avoid such complications, business credit cards must be used with more caution.

Choose a credit card that matches your business. Credit cards for business come in all varieties so you should choose the one that perfectly complements the demands of your business. If you prefer to get a business credit card with rewards, show around first to explore your options.

How do you intend to pay off your balances? Another important factor to consider when choosing a business credit card is how you plan to mange repayment. If you intend to use the card for larger purchases and pay in installments, then you should look for a card with the lowest possible APR. On the other hand, if you want a rewards business card, you should make sure that you can pay off your balances in full each month.

Practice timely payment. Paying on time isn’t just for personal cardholders but for everyone, including business owners. Avoid the late penalty charges by submitting your payments before or on your exact due date.

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Don’t use your business credit card for cash advances. Most credit cards for small business have the cash advance feature which means you can use it to borrow cash from an ATM. Nevertheless, keep in mind that cash advances are charged with high interest rates and transaction fees which can easily put you in debt.

Check your account regularly. Aside from your monthly billing statement, another way to monitor your business expenses is to access your account online. If you have distributed supplementary cards to your employees, make sure that all the charges in your account are officially made for business. Last but not least, avoid using your business credit card for your personal costs to avoid bad debt.

Business Credit Cards for Home Based Businesses

What is the advantage of using a credit card for business rather than a personal credit card? First, an entrepreneur can separate business finances from his/her personal money. There is no need to use the same credit card in buying your groceries and your inventory for your shop. Initially, combining personal and business spending may not create a problem, but as you gain more customers and your inventory increases, you’ll see that having two separate accounts is invaluable.

By using your business credit card in buying stocks or paying your suppliers, official business expenses are automatically reflected in your business account. Whenever you need to do your inventory or auditing, you can simple refer to your business credit card account or your monthly billing statements. Add to this, issuers of business credit cards provide yearly summary reports of all your costs for the entire year. By the time you need to file your taxes, it’s easy to see which purchases are eligible for home business tax privileges.

Having a business credit card is a wonderful financial support especially when unexpected costs arise. For example, if you received a large order from one of your long time customers and yet you don’t have sufficient cash resource, you can use your business credit card to pay for the things you need to deliver your customer’s order. This way, you can accept unexpected orders and pay off your credit card balances after you receive your customer’s payment.

Rewarding credit cards for Business

It is worth mentioning that credit cards for business come with bigger and more exciting rewards programs. Needless to say, business owners tend to spend more and by using your business credit card, you can easily earn points and qualify for rewards.

Business credit cards with cash back rewards are particularly in demand among entrepreneurs especially those who are in the buy and sell business. As they charge their spending to their card, these entrepreneurs get more cash back in return. Enjoying cash back privileges means you get to enjoy savings from your purchases.

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The other two popular types of reward credit cards for small businesses are the Travel Rewards Cards and the Gas Rebates Credit Cards. For business owners who travel a few times a year for business purposes, a Frequent Flier Miles business card is a great choice. On the other hand, for those who use delivery vans, truck or other vehicles for business, a credit card with gas rebates is a practical choice to save from gasoline purchases.

Indeed, credit cards have come a long way since they were first introduced as a mode payment. If you are an entrepreneur yourself, you should certainly consider getting a business credit card to enjoy the benefits.

How can a business credit card help in managing my small business?

Keeping your business financing separate from your personal budget is very important. Some home business entrepreneurs may prefer to use their personal credit cards in buying stocks for their shop but in the long run, doing your inventory and auditing can become complicated and time-consuming. You could spend hours trying to identify whether a certain purchase was for your business or for your personal use.

With a business credit card, business expenses are automatically reflected in your account. Credit cards for business are also indispensable for building your corporate credit. After registering your company with a business credit bureau, opening a business credit card account will add up to your company’s good reputation.

Are business rewards credit cards worth the choice?

Credit cards for business with rewards programs come in a wide range of categories so you can pick one that best matches the spending needs of your company. Cash back business credit cards are ideal for entrepreneurs who purchase stocks in large bulks. Business credit cards with gas rebates are perfect for business owners who maintain a number of trucks or vehicles for deliveries and frequent flyer miles programs are great for entrepreneurs who often travel abroad to meet clients or purchase new inventory.

The important thing to remember about using a business credit card with rewards is to pay off your monthly balances in full each time so you can skip the high interest rate charges. By doing so, you can make the most out of your rewards.

What important factors should you consider when choosing a business credit card?

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How can you choose the best business credit card for you? First, consider carefully what you need. Next, compare different business credit cards based on the interest rate, fees, terms, and the features available from each. Get to know the limitations about each credit card for business. It is also a good idea to read reviews online so you can make comparisons more accurately.

Why should you read the fine print?

Before submitting your credit card application, make sure that you’ve read the entire Terms and Conditions and that you understand and agree with those terms. Remember, choosing a business credit card is a serious decision and one that must never be done in a hurry.

New Business Credit Cards – What They Are

New business credit cards are offered for entrepreneurs who have just started up their businesses. It can either be a small enterprise, a home business or an online retail shop. Because small business owners need all the help they can get when it comes to financing, a credit card for business can provide that much needed support.

By acquiring a small business credit card, a new entrepreneur can make advanced purchases and pay for them at a later time. For instance, if you’re going to start an online business, you’ll need a computer system to launch your operations. With a credit card, you can obtain the computer right away, charge it to your business card and pay for it in monthly installments.

Many issuers of business credit cards offer reward programs. An entrepreneur can enjoy gas rebates, travel rewards, and cash back rebates just by charging business purchases to the credit card. And because business owners tend to have bigger spending, earning points and redeeming rewards is a lot easier.

Build Business Credit through New Business Credit Cards

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Building a separate credit history for your company is one of the most important benefits that you can get from a business credit card. Be sure to register with Dun & Bradstreet- the leading business credit tracker in the US. As soon as you opened new accounts, make sure that your creditor will report your payments to the business credit bureaus.

Be smart in using your small business credit card. Watch out your credit limit! Financial consultants recommend using only 40% of your given credit limit to keep your business credit in good standing. Charge only business purchases to your card so you can keep track of your spending and avoid unnecessary expenses.

Choose a Business Credit Card that Fits Your Needs

Choose a credit card for business that best complements your business. Don’t rush into signing up for a business credit card even when the offer seems tempting. Instead, take time in reviewing and comparing your choices to be sure that you’ll come up with the right decision. Before submitting your application, examine the Terms and Conditions of your chosen small business credit card and see to it that there are no vague statements or hidden charges in your contract.

Corporate Credit Cards

Corporate credit cards are specifically designed for larger firms and corporations. These business credit cards are customized according to the exact demands of the business owner. Since these cards are not offered for all businesses, credit card companies do not advertise about them. If an owner of a corporation wants to apply for a corporate credit card account, all he/she has to do is call a credit card company and schedule for a meeting.

Before submitting an application, the business owner along with his/her executive staff will meet with representatives from the credit card company. The goal is to discuss the company’s exact needs regarding the credit card account. Because a corporation houses a large number of employees, distributing supplementary cards really involves planning and preparation. The credit card company will make sure that the demands of the corporation will be met and that the corporate credit card will be designed according to the client’s preferences.

Small Business Credit Cards

Credit card issuers introduced another type of business credit card in the market- these are small business credit cards. As the name implies, this business credit card is available for all business owners, even home based entrepreneurs and Sole Proprietors.

Applying for a small business credit card is easy since application can be done online. Just like with standard credit cards, the applicant’s credit history will be taken into consideration. Needless to say, the best deals are reserved for entrepreneurs with good to excellent credit. If you feel that your personal credit score is not as impressive, you may consider applying for a secured business credit card.

Business Credit Cards – Partners for your Business

Regardless of the size of your company or what industry your business belongs – credit cards for business are wonderful tools to keep your business running smoothly. Do your research now and find a business credit card that best complements the needs of your company.

Use your credit card for business to build a separate credit history for your company and keep a good business credit. Make sure that your issuer will report your payments to the major business credit trackers such as Dun & Bradstreet and Experian for Business.

Understanding Your Business Credit Paydex Score

The Paydex Scoring System was developed by Dun and Bradstreet or D&B, a leading credit reporting agency in the US. D&B is in charge of recording all payment reports from banks as well as business-to-business lenders and merchants. The Paydex Score is used to calculate credit history for business entities and is the equivalent of the FICO score for individual consumers.

Newly established businesses are encouraged to register with D&B to start building a separate credit history for their company. Thus, as you open business accounts from banks and business-to-business to merchants, you are also building your business credit rating. Nevertheless, take note that not all lending companies and suppliers have provisions on business credit reporting. As a business owner, it is up to you to ensure that your lender or supplier provides this important service for you.

The Paydex Scoring System ranges from 0 to 100, with 90-100 as excellent scores; 80 and below as good; and 70 and below as bad scores. Obviously, all entrepreneurs must make it a goal to reach a Paydex Score of at least 80 and above to enjoy good standing.

How to Raise Your Paydex Score

The Paydex Score is calculated based on several factors. Just like with the FICO Scoring System, timeliness of payment is considered to be a big factor in your total score. Hence, occasional late payments with your business credit card or business loans can put your business credit rating in danger. Clearly, the best way to protect your business credit rating is to be consistent in submitting your payments.

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What if it’s not possible for you to a payment on your due date because of financial issues? In this case, the smartest step to do is to speak with your creditor and ask for an extension. Many lending companies will gladly cooperate as long as they’re given an advanced notice.

Another important factor that affects your Paydex Score is the credit variations. The types of credit or types of account that you open up can make a different in your rating. It is a good idea to try to open a business credit card account along with your business loan to raise your score.

Check your business credit report on a regular basis- ideally, at least twice a year to ensure that the details contained in your report are accurate. Do not hesitate to contact D&B if you have any issues or concerns about your business credit history.