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Many
new small business owners do not have a
credit card
account specific to their business. They might use
a personal credit card to make business related
purchases every now and then, but the majority of
new business owners overlook the value a business
credit card may provide to their business.
There are many reasons why a small business owner
would benefit from having a credit card account
specifically reserved for their business use.
First, though, let’s discuss the typical reasons
why a small business owner would avoid a credit
card!
Top 6 Reasons Small Businesses DON’T Have
Credit Cards
1) Business owner is afraid that they will
overspend if they have access to a credit card.
2) Business owner thinks it’s complicated to apply
for and receive a credit card under the business
name, or feel they don’t have strong enough credit
to get one.
3) Business owner thinks finance charges
and interest rates
will be expensive and cost more money than the
convenience of having a credit card is worth.
4) Small businesses don’t make enough purchases to
require a credit card.
5) Business owner likes the control over spending
by employees when a check or cash has to be issued
for purchases.
6) Business owner applied for one and was denied.
Is the reason your small business doesn’t have a
credit card found on this list? If so, you might
be surprised how the benefits of having a credit
card for your business can help propel your
business forward.
Credit Card Benefits for the Small Business
Owner
While many of the reasons small business owners
decide not to get a credit card for their
businesses are valid, there are many advantages to
the businesses that do decide to get a credit
card.
When you make all of your business purchases and
pay for each expense related to the company on a
single credit card, you have an easier time with
your bookkeeping. You can simply refer to your
credit card statement each month, or on a
quarterly or annual basis in order to see your
purchases and expenses at a glance. You can cut
one check each month to pay for all of the
purchases, making it much easier to manage your
business checking account, also.
Having a company credit card allows you to get
additional cards in key employee names. If your
office manager handles the office supply
purchases, you can give her a card to make those
purchases with, for example. There is less time
required of you to approve or deny his or her
orders and no need to cut a check when the manager
is ready to place the order. Simply give the
employees with cards a spending allowance and you
can quickly monitor the spending of each employee
by glancing at the card statements.
If you select a credit card for your business that
offers a rewards program,
you will benefit further by achieving the rewards
under that benefit. As a business owner, you would
decide if you have reason to purchase airline
tickets, or if you would benefit better from a
card with cash back
or special merchandise purchases with the points
you’ve earned.
Having a business credit card opens the door to
many opportunities for your business that you
wouldn’t have if you avoided having a card. Be
sure to take these benefits and advantages in
consideration when deciding whether or not to
apply for a business credit card. If you fear your
business credit isn’t strong enough for a card at
this time, you can opt for a prepaid card or a
secured credit card
to build your company credit history.
You’ll still receive all of the benefits and
conveniences of a credit card, you’ll just need to
take the extra step of funding a prepaid card
before you can use it.
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