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A small business credit card or corporate credit card can help you keep your company's expenses on track and obtain the buying power you need to operate your business. Some business credit cards also reward you for all your business purchases in the form of cash back or airline miles. Learn more in these articles and tips on credit cards for small business.
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One of the primary benefits of a business card is to separate your personal finances from your business account. This helps limit your personal risk in case things go badly for the company.
Managed properly, a business card can build a company credit history to secure short-term loans and help capitalize on everyday spending with vendor discounts and rewards. It also has unique benefits, like being a one-stop resource for expense tracking that can improve record-keeping.
You can also find sign-up bonuses, such as cards with a 0 percent introductory APR that can be useful for pricey one-time purchases to support a new business. Just be sure to read the fine print, so you understand the risk of deferred interest.
In choosing a business card, find a lender that can supply financial reporting that fits nicely into IRS categories and provides a credit line ample enough to easily absorb your periods of heaviest use.
You'll also want to find card rewards that cater to your business habits. Do you travel a lot? Look for rewards on airline tickets, hotel stays and rental cars. Are you always driving? Other cards will offer cash-back rewards on gasoline purchases and wireless telephone services. If you're a neighborhood business, look for cards that offer discounts at retailers where you get your supplies.
As with a personal card, a business owner will be subject to a credit check during the application process. If approved, you'll have a credit limit, minimum monthly payments and an interest rate based on creditworthiness.
Also, be sure to have paperwork that supports your application, such as your business tax identification number and financial documentation.
Financial institutions may ask for a personal guarantee before extending a line of credit to a new company. Avoid this step if possible. Offering that guarantee can make you personally liable for any of your company's unpaid debt. Remember, you want to separate your personal finances from the fate of the company as much as possible.
After you secure the credit card, be sure to lay down the ground rules with employees. Make sure they know exactly when and when not to charge the credit card. If necessary, you can often adjust the credit limit on a particular employee card as well as limit the credit on certain purchases.
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