Want to review your business’s finances in the new year? Your credit card is a good place to start. Take advantage of the January blues to fine-tune your budget, up your rewards game and explore balance transfer opportunities.
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For business owners, the holidays are a time to celebrate as shoppers pick up the spending pace. Once the holiday high wears off, however, you might find yourself in a midwinter slump. A temporary sales slowdown isn’t ideal, but it is an opportunity to do some financial housekeeping.
“We often spend the new year reflecting on the past and making resolutions for the future,” says Chelsea Krause, accounting and business analyst for payments processor comparison site Merchant Maverick. “January is a great chance for small-business owners to do the same thing in regard to finances and business operations.”
Your business credit card is a good place to start. It can help you cover expenses during the slower months and, with the right planning, set a positive tone for the rest of the year.
Here’s how to get started.
4 business card tips for beating the January blues
Use last year’s credit card spending to set your budget
Your card can be a huge help in creating a plan for spending over the winter and beyond.“Having a solid budget to start off the year is the best way to control expenses and build the foundation for business success throughout the year,” says Cyndie Martini, CEO and president of credit union card processing platform Member Access Pacific.
- Check your card’s year-end summary to see how much you spent total and where you spent it.
- That’s easy to do if you’re reviewing your annual summary through your card’s online account access.
- You can sort purchases by category to see what you spent the most or least on throughout the year.
Krause says reviewing your spending, along with other key reports such as a balance sheet and statement of cash flows, can help you make critical decisions for the new year, including how to increase revenue and where to cut back expenses.
As you review your card’s year-end summary, make sure the numbers sync up with your accounting records. If you’ve been reconciling credit card purchases manually, the best thing you can do is automate that step, says Martini.
“All your credit card expenses should align with your expense categories in your accounting software,” says Martini. “This will save you hours, even days, of tedious work.”
Size up your card’s rewards program
Use the holiday lull to reconsider your card’s rewards program to make sure it’s still a good fit for your business.
- Total up the miles, points or cash back earned for the previous year.
- Consider how you can maximize rewards for the coming year, based on your estimated budget.
- Look into leveraging the rewards you’ve accumulated to save your business money.
Business owners need to evaluate whether their spending profile will deliver net rewards, says Jason Vissers, loans and credit card analyst for Merchant Maverick. If your card’s rewards program aligns with how you currently spend, then consider how you can get the most from it over the next 12 months.
- Check your card’s travel partners if you’re planning a business trip to see if you can transfer miles or points for a higher redemption value.
- Join your preferred airline or hotel’s loyalty program, if you haven’t already, to earn additional points or miles toward frees stays or flights.
- Stack even more rewards using cash back apps, deal websites and small-business discount portals.
- Redeem cash rewards as a statement credit against expenditures that could help grow your business, such as marketing or new equipment.
If you’ve been using multiple cards to earn rewards on business spending, consider whether that’s an effective strategy. Keeping them all may not be justified if you’re leaning on one card more than another or paying a high annual fee for a card with a lower rewards rate.
See related: A credit card checkup includes reviewing annual fees
Shop around for a balance transfer offer
You may be heading into January with a balance if you used your card to get your business ready for the holiday shopping season. With interest rates on the rise, there’s no better time to consider a transferring the balance to a card with a low APR.
“A card with a 0-percent balance transfer can definitely assist your business in consolidating expenses while saving money,” says Vissers. “We don’t know for certain whether these cards will be harder to find with interest rates going up, so it may be wise to lock in a deal sooner rather than later.”
Martini advises looking for balance transfer offers during the first quarter. “These are not strictly for business credit cards, but financial institutions are looking to stimulate transactions in the early months of the year and some good balance transfer promotions are to be had,” she says.
While it’s possible to transfer a business credit card balance to certain personal credit cards, you’re better off sticking with a business card transfer offer. This keeps your business credit card debt from affecting your personal credit score. Business and personal spending also remain separate, which makes accounting and filing taxes less of a hassle.
If you need some suggestions, try:
- The Blue BusinessSM Plus Credit Card from American Express, which has a 0-percent introductory APR on balance transfers for the first 15 months. After that, the card comes with a variable APR of 13.49-21.49 percent.
Check your card’s terms and benefits
Review your card’s terms and benefits to determine how much value it offers overall. Start with your current purchase APR.
If you carried a balance in the past year, ask yourself whether you paid a competitive rate, says Gerri Detweiler, education director for business credit and financing site Nav. “If you paid a high APR or it took you longer than expected to pay it off, you may want to shop for a credit card with a lower rate.”
Next, review card fees, including the annual fee, balance transfer fee and foreign transaction fee to see if these have increased or decreased over the last year. Conduct a similar audit of your business card’s rewards program.
For example, Marriott Rewards merged with the Starwood Preferred Guest Program and Ritz-Carlton Rewards. If you have the Marriott Rewards Premier Plus Business credit card or another business card affiliated with these programs, you’ll want to know whether the change affects how you earn rewards and your ability to qualify for elite status.
See related: What’s new with the Marriott Rewards program?
You’d also want to see if any of your card’s additional benefits have changed. Perks like reimbursement for Global Entry or TSA Precheck are becoming more common, while others, such as price protection and extended warranties are increasingly disappearing.
If your card hasn’t changed much and you’re still satisfied with it, it may be business as usual. But, if you’re seeing fees climb and benefits diminish, it may be time to upgrade your business card.
Finally, if you’re still using a personal credit card to finance your business, consider switching to a business credit card over the winter break, says Detweiler. Not only can you earn money-saving rewards, but “most business credit cards help build business credit, which is another advantage.”