2. Distinguishing Personal and Business Expenses
If you own a small business or are a sole proprietor, having a business credit card can help you easily divide your personal and business costs.
Not only will this save you time on a monthly basis, but having two separate statements will also make record-keeping and submitting your annual tax return easier. Some business credit cards will even provide online features to help you track your costs – far more convenient than saving a year’s worth of invoices and receipts in a physical file!
They frequently include unique export options that make it straightforward to transmit pertinent data to QuickBooks or other accounting applications. Furthermore, having instant access to your company’s expenditure data can help to speed up financial transactions and potentially allow you to take advantage of possibilities — such as purchasing property and goods — more rapidly.
3. Rewards in the form of points, cash back, or other incentives
Business credit cards, like personal credit cards, frequently provide points, cash-back, or other excellent incentives — including sizable sign-up bonuses! For example, suppose you have a business credit card that offers travel credits (such as those provided by American Express or Chase). In that case, you could earn discounted (or even free!) airline tickets and hotel stays. As a result, your out-of-pocket payments may be reduced.
4. Excessive credit or spending limit
Business credit cards may have more considerable credit or spending restrictions than personal credit cards. Indeed, in some circumstances, the restrictions can exceed $50,000 or $100,000! Higher credit card limits enable you to make purchases that would not have been possible if your organization had cash.
5. Possibility of Increasing Your Credit Score (While Not Impacting Personal Credit)
Having a business credit card — and paying off the debt regularly — can help increase your company’s credit rating rapidly, provided that the merchants and suppliers you engage with record transactions with the credit agencies. While you are still responsible for business credit cards, a business line of credit is wholly independent of your credit line. This is significant because your utilization ratio and other indicators should not impact your credit score.
