At the beginning of a new business, many entrepreneurs start using credit cards for personal use to cover their expenses. It’s the shortest route to resistance.
But, when your company is established it will be able to reap tangible advantages from the use of a good corporate credit card i.e. the credit card that is in your business name, which is only used for business use.
Here are the benefits of business credit cards can provide your business with to expand and become profitable.
1. Expands Your Overall Available Credit
If you’re pursuing big goals to expand your business, the growth of your business could be held back through personal credit cards to conduct business.
Why? There may be less credit for purchases for your family due to the fact that you’ve used your credit for business use in reverse.
A separate business credit card as well as an individual credit card for personal use each with its own credit limit, could provide you with more credit for your business and your family members.
Also read: How to Apply For A Business Credit Card : A Complete Guide
2. Establishments Business Credit History
A business credit card can help you create a business credit record for your company.
Small-sized businesses are often denied loans or have poor terms for loans due to the lack of the credit history of the company. As per Tom Gazaway, founder and CEO of LenCred.com, “From the business owner’s perspective, the importance of credit for business has grown in recent years, and all indications indicate that this trend will continue into the future also. It all depends on the kind of loan you are seeking, however, the importance of business credits is evidently growing.”
3. Access to Other Financial Products to Fuel Growth
Being a small-business owner requires constant research into ways to boost the size of your company.
A way to use a business credit card in order to expand your business might not seem obvious. If you choose to use a business credit card from an institution that offers many products designed for companies, it could be the beginning of a solid financial relationship.
For instance, a firm such as Chase provides a type of credit card for businesses. You can get access to commercial-sized credit lines in addition to a credit card that will provide your company with greater buying power and growth.
“Chase provides financial services to satisfy the needs of small businesses regardless of where they’re at the beginning of their company,” said Laura Miller the director of Ink from Chase. “The Ink business credit card gives you a longer working capital period and helps simplify the management of everyday banking transactions.”
4. Maintains Separation of Business and Personal Expenses
If you are a member of a corporation (or LLC), it’s crucial to consider your company distinct from the financial circumstances of your own personal. This is crucial to ensure the limits of personal liability as per Nolo.com. If you combine your personal expenses with business expenses, you may eventually be unable to obtain the legal security you’d hoped to attain when you incorporate or form a limited liability company.
Additionally, for tax-related reasons, it’s good that you keep business-related expenses in a separate place. Only expenses that are related to business can be deducted in a business tax return or Schedule C that you must file. Business credit cards, by their nature, will help keep the business expenses apart.
5. Use Technology and Saves Time
A business credit card with modern technology can do a lot of the bookkeeping for you.
It makes managing your budget for expenses simple and less effort on your part to determine the exact amount you spend and at what amount. The system also maintains records that are properly to be tax-related and makes tax time less of a hassle.
This is why it’s crucial to examine the technologies the credit card company you use. A good technology can drastically reduce the manual effort required to manage your financial affairs.
It’s not an old-fashioned technology to think about. You must ensure that the technology is made specifically for business owners, providing accurate information in a way that is suitable to be used by businesses.
For instance, Ink from Chase mobile app Ink from Chase mobile app provides sophisticated record-keeping and analysis tools.
Also read: How to Improve Your Credit Score
6. Lets You Delegate Yet Limit of Employee Spending
As your business expands and you add employees, delegating is a crucial capability. You must give your employees the authority to make decisions and not force them to submit to you with minor issues. However, you’ll need to have control over crucial issues like your business finances.
This is why a business credit card such as Ink from Chase can be a powerful delegate tool and a management aid. Ink provides free employee cards which allows you to provide your employees the power to purchase what they require, within the limit you require. The monitoring of each card is easy using Ink’s mobile app: Ink mobile application:
- Adjust and set your individual spending limits on the move.
- Receive instant notifications for each purchase to be aware of when and where your customers are spending your money.
- Employee cards are free and can allow you to earn rewards more quickly.
Gain more control and reward for every purchase made by employees. How do you balance delegating and maintaining control?
7. Earn Valuable Rewards
Not to be left out take a look at the rewards you can get from the business card you use.
A lot of people are focused on the amount of reward they can earn. This is important.
But the proof of the pudding is when it’s time to redeem and utilize the rewards.
You should look for ease of redemption and flexibility in reclaiming rewards. Is it easy to redeem the rewards on the Internet? You can use the rewards in many different ways, including travel as well as gift cards.
When you begin the path of expansion and growth, a business credit card with thoughtful rewards can be an important factor in the success of your business. Make sure you choose cards that do not just give you rewards, but also allow effortless redemption, allowing you to invest in your business in a strategic manner. While you’re enjoying these benefits, remember that the choice you make with your credit card company is crucial. Find partners such as Chase which provide a range of financial products that can help the various phases of your company’s lifecycle and ensure that you have the funds to help you grow.
In essence, your business journey is defined by constant development. Accepting a business credit line isn’t just about transactions; it’s about increasing your company’s potential. Taking advantage of a business credit card allows your business to grow, maximizing opportunities and laying the foundation for a bright future.