Should You Get a Business Credit Card

get a business credit card

A business credit card can serve as an easy way to increase your company’s purchasing power, whether it is big or small. Business credit cards work very similarly to personal credit cards?

What is a business card card?

A business credit card provides companies with accounts that have a line of credit up to a set limit. The cards can then be used to make purchases in the business’s name, allowing a separation of business and personal finances.

As such, business credit cards can make it much easier for businesses to keep an accurate record of both their spending and cash flow.

How can my business use a business credit card?

Business cards can be used by businesses and their respective employees to pay for anything that they would normally pay for, business-related, on a credit card. This could include spending on travel, furniture, entertaining clients, business equipment and paying invoices.

If a business is able to pay off the money they spend quickly, this could be 0% interest or only incur the monthly fee which is usually around £25 to £35. 

Businesses can apply for a business credit card online, by phone or visiting a bank branch in-person. Often, some bank providers will only let you apply for a business credit card if you already have an account with them. You will still need to put through a new application however.

A business will need to provide their bank provider with necessary details in their application for a business credit card. These details include the business’ name, the type of business it is, the sector the business is in, the number of employees, the trade start-date, the reasons behind needing the business credit card as well as the desired credit limit.

What are the benefits of using a business credit card?

There are several benefits of using a business credit. Here are just a few:

  • It can help your business to manage your cash flow. The business will be able to pay for items while waiting for incoming funds
  • Businesses are able to claim several cards with just one bill to pay making it easy to see all employee’s relevant business expenditures
  • Employees can use business credit cards to pay for their work expenses, which saves both parties the hassle of extra paperwork and chasing
  • Business credit cards can be used in instances where emergency money is needed and it takes away the need for a business loan
  • If business credit card statements are paid off in full in the first 56 days of being issued to the customer, then no interest is charged on the spending
  • A lot of business credit cards today often come with cashback, nectar points or avios miles

What are the disadvantages of using a business credit card?

While the benefits may outweigh the disadvantages for a number of businesses, it is still worth mentioning the following potential downsides of a business credit card:

  • Business cards may actually come at a greater expense. This is because they typically charge a much higher interest rate than small business loans. If the statements are not paid off in full each month, the interest can add up quickly
  • The majority of small business credit cards require a personal-liability agreement to repay any debt. This means that any late or missed monthly payments could result in a negative personal credit report, overriding the benefits of the separation between business and personal finances
  • Small business credit cards often do not carry the same levels of protection as consumer or personal credit cards. It is always worth checking the level of protection before pursuing a deal with your bank provider

I need help with:

Affiliate Disclosure: This post may contain affiliate links, meaning we get a commission if you decide to purchase something using one of our links at no extra cost to you.

[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]