Why Small Business Credit Cards are Vital to Successfully Mastering Your Finances

If you’re a small business owner or you’re planning to be one soon it’s important to think about credit cards.  No, not the ones you have in your wallet right now, you’re going to need new ones!  That fact will excite some people and terrify others.  No matter what your case is, it’s vitally important to open a line of business credit.

Do I Qualify?
One of the biggest questions I get about opening a business credit card is whether or not a certain business is ‘too small’ to get a business credit card.  A lot of people think they have to be a large corporation.  On the flip side others think it’s fine to just use a personal card because their business is so small.

No matter what size your business is it’s best to get a business credit card rather than use your personal one.  It will take a bit more work to qualify for a good line of credit than it did for your personal account, but the effort is well worth it.

Why Can’t I Use My Personal Credit Card?
You might have heard it before but it bears repeating.  You should never mix your personal finances with your business finances.  There are many people who do this, and hopefully you won’t be one of them.

Whenever you make a purchase you need to know whether the purchase was for your home or business.   You might think that it is easy enough to keep track of, but you’d be surprised at how many people spend time wracking their brain to figure out if that dinner out was for business or pleasure. 

When you have a business credit card there is no guessing.  Time is money, and you’ll have more of it when you have a business line of credit.  All you’ll need to do is track your business expenses on one account, and personal expenses on another.  There is no need to guess what goes where.

Along those same lines, there might come a day where your business taxes are audited.  The IRS likes to see a separate business line of credit where it is obvious which things were purchased to further your business.

How Do I Apply For a Card?
The next bit of news is tough to take for some entrepreneurs who are nervous about starting a small business.  It can be a lot harder and is more work to get a business credit card.  Don’t worry; you’ll get through this! 

Business credit cards are just more customized than personal lines of credit.  There are different limits and types of card according to the kind of business you run and how much credit you need.  Obviously, the larger the scale of your business the more credit that is needed.

There are different requirements depending on the company you choose to apply with.   Some may require you to submit a full business proposal.  This will include where you plan to go with your business, what type of business you’re running, what you plan on doing with the line of credit, how you plan to repay the credit card, and any collateral you have (among other things- check with your chosen company). 

Many creditors also require a financial statement from you and will run a credit check.  Keep in mind that there is a difference between a personal credit reputation and the one you will build with your business.  If your business does not have a credit reputation your personal one is the fallback.  This can either help or harm your situation, but there are offers that will work for you if you do your homework.

What Should I Look For?
Don’t just settle on the first credit card offer you see, it’s best to shop around a little.  After all, there are many different credit card companies clamoring for your business, so you should make them work for it!

Definitely check the APR the card charges as well as any annual charges and hidden fees.  If a certain offer is too high you can try and negotiate with the credit card company to get it lowered. Of course, that depends on your credit score and your business.

Beyond the general things there are also special perks that come with owning a business credit card.  Here are some of the more fun things you’ll come across:

• Business discounts on airfare, hotels, car rentals, phone access, copy services, and shipping services. These discounts are special for you just because you are a small business owner.

• Introductory offers are another thing to check.  There are many that offer no payments for six months to a year or a 0% APR for a certain amount of time.  When you just need a chance to get your business up and running this can be a big help.

• Business rewards a great as well.  If your business sends a certain amount of money you will get rewards back.  This might be in the form of money, air miles, products, or services. 

Get Ready and Apply!
You need to gather up all the information the credit card companies will ask you for and apply as soon as possible.  You can really start your business the right way and get the funding you need with a business credit card.  Trust me, it will make your life a lot easier in the long run.