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Your Business Credit

How business credit cards can help you reopen

As Americans start to venture out more, your business may be picking back up. Credit cards can help you with cash flow and much more

Summary

If your area has relaxed social distancing requirements and adapted to new CDC safety guidelines, you may be ready to reopen your business. Business credit cards can be a critical tool in your arsenal, helping you with cash flow, record keeping and more.

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Many small business owners are diving into reopening as their cities and states relax social distancing requirements and adapt to new CDC safety guidelines that allow for more outdoor activities with no masks. Business credit cards can be a critical tool in their arsenal.

How business credit cards can help you with cash flow

If money is still coming in slowly and you need to make critical business purchases, putting them on a business credit card can help you keep cash on hand for other critical spending, like making payroll. You will still have to pay for your purchases in the end, so it is important to use your card only for what you really need to keep operations going.

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Increase your purchasing power

Business credit cards can also help you to rack up points you can use to buy things you need for your business. If you have selected a business card that rewards you for the purchases you make most frequently, you’ll be surprised at how rapidly you can build up points.

For instance, the American Express® Business Gold Card offers 4 points per dollar on two select categories in which you spent the most each month (for the first $150,000 in spending per year). It offers 1 point per dollar on all other purchases, but it also has a rather high annual fee of $295.

If you want high rewards earnings with a lower annual fee, you might consider the Ink Business Preferred® Credit Card from Chase. You’ll earn 3 points per dollar on travel, shipping, internet, cable, phone services and advertising (on up to $150,000 in combined purchases each year), and 1 point per dollar on other spending. It has an annual fee of $95.

Besides letting you use your points for purchases like plane tickets, some cards will allow you to redeem them for gift cards to stores you frequent or to get cash back, which can come in handy in making business purchases.

See related: 10 things to know about business credit cards

Better record-keeping

As your business recovers, business credit cards can also help with record-keeping, allowing you to keep track of all or most of your business spending in one convenient place. At tax time, you’ll have a clear log of where you made business purchases so you can claim the appropriate tax deductions.

It’s easy to forget about purchases you made in cash and to lose receipts for them. If you use a business credit card, you will not lose track.

Making purchases more convenient

Accepting credit cards – both business and personal – can also be key to your reopening plan. Many small business owners shied away from accepting credit cards in the past because they didn’t want to incur swipe fees.

However, in the current environment, many consumers and business-to-business purchasers are avoiding using cash to reduce the spread of germs. By accepting credit cards, you’ll make it easier for these customers to do business with you. Though you will incur fees, you’ll still come out ahead of where you would be if they go to another merchant that does accept credit cards.

That’s not to mention that many consumers, worried about new COVID strains, are still making purchases online rather than coming into stores to buy things. You’ll be more likely to capture their online business if you accept credit cards and are equipped for e-commerce.

Bottom line

Many small business owners had a tough time during the COVID-19 pandemic due to restrictions on how they could do business. Right now, it’s important to use every tool in your arsenal to get money flowing back into your coffers. Business credit cards can be very valuable on that front.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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