Since the number of small and home businesses is growing at such a fast rate, it shouldn't be a surprise that business credit cards are becoming more popular. Not too long ago, small business owners had to rely on small credit lines or business loans from banks to handle their monthly cash flow, which could be time-consuming and expensive. This meant spending more time doing paperwork for the bank and less time running the business.
Since business credit cards came out, these problems have become less of a problem. About 65% of small businesses use business cards right now, and that number is only going to go up. Most of the big banks now offer business credit cards, and the number of cards available is growing all the time.
Business credit cards give the owner of a small business a number of powerful benefits, such as:
Cash Flow Management - For almost every business owner, cash flow is the most important thing. A bad month can ruin an entire quarter if the business doesn't have any way to keep going. Business credit cards can be a big help when things aren't going well.
Credit Rating Goes Up: A business's credit rating can mean more than just getting money. Customers might not want to do business with a company that has bad credit, and the company's growth will be slowed down or even stopped. When used responsibly, business credit cards can help a company improve its overall credit score and open up new ways to get money in the future.
Spending Control: Letting employees buy things for the company on the spot can help make day-to-day business run more smoothly. This can also make it easier to spend money on things that aren't necessary or to spend too much on things that are. With a little planning, these problems are easy to solve, and recording and reporting business spending will be better for it.
Business taxes: Small and home-based businesses can use credit cards to keep track of all their business spending in one place. Even though this would be hard for a bigger business to do, there is no reason why a small business couldn't put all of its business expenses on a credit card. This means that all of a company's spending is handled by one place, and it's easy to keep track of when tax time comes around.
Rewards Programs: A good way to get bonus packages from rewards cards is to use a business credit card to track all business spending. If you put all of your business spending on one card, rewards like air miles and cash back really add up.
Business credit cards are a roundabout way to help clients remember your company. Take them to lunch and use the business card to pay. This shows that a company, even if it's new, has some stability and depth. It also helps to boost your credibility.
Business credit cards are useful for any size company because they help with things like cash flow, taxes, and spending. As with all credit cards, you need to be careful about how you use them. Even though they can be helpful to a business, they can also cause problems if they are not handled properly.
