Introduction
A small business credit card is essential for smooth running of day to day activities. These cards are increasingly gaining popularity and about two- thirds of all small enterprises use cards to meet their expenses. A small business credit card is an effective tool and can help small business to grow their operations. Right from the onset, it is essential to state that many small businesses collapse within their first year of operation mainly because of misuse of this credit facility. Business owners ought to be very careful on how they use business cards. As the name suggests, they should only be used to cover expenses incurred in the business. Some managers are known to buy suits or pay for their personal luxury items using business cards; this does a lot of injustice to your business.
History
There are various pitfalls to avoid when using a small business credit card and effective ways of managing business cards. It is essential to engage your local bank in your application for a small business credit card. Check their rates and compare them to other issuers. If you have been loyal customers to that bank you can negotiate for a discount. The process is made easier if you get the card from your local bank. This way you are able to synchronize your transactions and you can get full reports and statements from the bank every month. This helps you to monitor and plan for your expenses. You should always strive to make timely payments. Failure to honor your payments within the stipulated time frame results to higher interest charges, costly fees and this also tarnishes the businesses credit record. Prudent usage of your small business credit card is paramount.
Features
You should also capitalize on the grace period offered by your provider; this can be used to improve on your cash flows. It is advisable to make purchases and pay for your bills online. This option is safe and secure and the transactions are not compromised. Again, it also saves you time and you avoid paying extra costs which are charged when you use other main stream methods. Your payments are also processed in good time and there are no delays. In spite of what you may have been told and heard, having multiple cards will not improve your credit rating. Maintain a few cards, preferably not more than four. Multiple cards will blemish your scores and managing them is also a tall order.
Tips and Comments
There are numerous benefits of having a small business credit card as opposed to using your personal card for business dealings. This ensures that your personal charges are separated from business transactions since mixing them often creates problems. Having a small business credit card is also considered professional and third parties like the IRS can better monitor your business transactions. With correct usage, the business card is a strong tool to make your business grow and expand. It can also be used to build your credit history and you can enjoy better facilities in future.
