Why Your Business Should Have Separate Credit Cards

Merchant services companies

When opening a small business, many entrepreneurs choose to do much of their business shopping with a dedicated business credit card. There are many advantages to using a business credit card.

Using a credit card for all your business purchases is an easy way to keep track of all your transactions. While you should still keep your receipts, credit card statements simplify working capital management. In addition to being a good record of company spending, small business credit cards can increase the company’s credit score, and many credit card companies offer benefits and incentives for card use. From a small percentage of cash back on certain purchases to point of sale discounts to frequent flier miles, card usage benefits can be a great asset to the company.

Many merchant card services offer easy cash advances as one of their many services. Merchant credit card cash advances can help businesses keep their bill payments on track, prevent checkbook overdrafts, or simply provide a little extra capital for last-minute investments and purchases. Most merchant credit card cash advances are paid off within the cardholder’s next pay period.

Other benefits of small business credit cards include higher spending limits and lower interest rates. This ensures that a company will have the capital available for all their needs without having to give up their profits to cover interest payments. Business credit cards can also protect company owners during a lawsuit. If the company is a limited liability company (LLC), the business owner may be at risk of losing their personal assets during a lawsuit. A business credit card helps the company owner show that their personal finances and business finances are separate, thereby protecting the personal assets from seizure.

While applying for a business credit card may sound like just another piece on the stack of endless paperwork, the advantages far outweigh the inconvenience. In fact, it is far more inconvenient to be caught without one. See this link for more references.

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