Separating business funds from personal finances should be every business owner’s concern. Surprisingly, not many entrepreneurs take this matter into serious consideration. For instance, many small business owners and home based business entrepreneurs prefer to use their personal credit cards with their business expenses thinking that it makes no difference. But a wise business owner should think about the long term complications that combining personal and business funds in just one account could cause later on.
At the start, you may find that using your personal credit card is enough. But as your business begins to grow and accumulate expenses, having a separate business account is indispensable. It will make a big difference not only in managing your business finances, but also in making finance-related decisions. In this article, let’s talk about the advantages of using business credit cards for your business expenses.
Business Credit Cards Means Easy Management
Why would it be easier to manage business finances using business credit cards? Because all your expenses are automatically included in your summary of accounts so you can be assured that you won’t miss a single purchase no matter how big or small that purchase was. You will be provided with monthly billing statements, along with quarterly and yearly summaries of your account.
These account summaries contain a detailed list of all the purchases you’ve made during the past months or the entire year. Purchases are also categorized so you can use it as reference to your bookkeeping and accounting tasks. Filing your business taxes is definitely made easier with the help of business credit card account statements.
Add to this, many business credit cards include the option to access your account online. This is an enormous help for a busy business owner as it enables convenient tracking of business accounts at any time. Even as you work on your desk, you can simply log in to your online account and do your checking within just a few minutes. Account summaries are also downloadable so you can use them along with your accounting software.
Build Business Credit with the help of Business Credit Cards
Another important advantage of getting a business credit card is to build a separate credit history for your business. Don’t forget to register with a business credit bureau such as D&B or Experian to begin establishing your business credit immediately. By using your business credit card and keeping up with your payments on time, you can be assured that you will be building excellent credit history for your company.
Every business is confronted with financial challenges sooner or later. You may not need financial assistance at the moment but by the time you need to apply for a business loan to help you with your business projects, having a solid business credit history will help you secure an approval more easily. Aside form getting easy approval with your applications, having excellent business credit also guarantees that you’ll be offered better rates and terms by lenders.
In summary, getting a business credit card is beneficial in two ways- for separating personal from business finances and for building up a separate credit history for your business. If you’re a business owner or planning on starting up a business of your own, this matter is definitely worth the thought.
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Pamela Williams is a Loan Consultant, Internet Marketer and Writer. For years she had helped consumers and business owners especially regarding business credit cards. This resource is dedicated particularly on business credit card reviews, articles, tips and advice, and online application so that consumers and business owners may compare which is the best business credit card for their business. Copyright 2010 |
I’m using a business credit card and it helps me a lot managing my expenses. In fact, I have recommend this to my friends. Thank you for the great review
How can a person, with a working business get business credit if personal credit is poor?
Is there any options out there?
Sheree
Thank you Sheree for the good question.
It is possible to apply for a business credit card even if you have a poor credit. You must expect then that your initial business credit limits are smaller, with a much higher interest rate.
It is easier to build business credit when you have a good credit. If your personal credit is poor, your initial business credit limits are smaller, with a much higher interest rate. I would suggest to fix your personal credit first by paying your bills on time. Check 3 major bureaus, write dispute letter if there is any mistakes about your record. Later on, if you always pay on time, they’ll raise your credit limit and it is easier for you to apply for a business credit.