Credit cards make it easier to manage your finances. A credit card makes it easier for you to purchase necessities and to pay bills. Your business needs its own credit card that can be used for business related purchases.
Keep it Separated Want to keep things simple? Stop using your personal credit cards for your business purchases. Get a credit card for your business and use it when your business needs to pay bills or buy supplies. Doing so will make it a lot easier when it is time to pay state and federal taxes. You won’t have to take the time to sort out business expenses from personal ones.
Easier Credit Monitoring Separating your personal expenses from your business expenses makes it easier to monitor your credit. If both are jumbled together, it becomes difficult to determine if the problem was due to a personal expenditure or a business one. Keeping the two completely separate means your business’s credit score is truly for the business. This information can help if your business needs a loan, considers an acquisition, or decides to merge with another business.
Pay Your Bills on Time Your business can pay bills on time – or early – by using a business credit card. This is a good way to improve your business’s credit rating. It also makes your creditors happy! Maintaining good relationships with your business’s creditors helps improve your business credit score. It looks good when your business has long, positive, relationships with creditors.
Cash Flow Management A business credit card provides daily transaction records and monthly spending breakdowns. That data might help you identify which weeks of the month, or months of the year, require you to make extra expenditures. This knowledge can help you discover when the best time is to make an expensive purchase. A business credit card can be set to automatically pay regular bills and expenses.
Improve Your Chance of Getting a Loan One thing a business credit card can do is establish that your business is able to pay back what it owes to others. In a way, a credit card is similar to a loan. Your business “borrows” money from the credit company, and then pays back what it owes (plus interest). Someday, your business might need a loan. Your chance of getting approved for a loan improves when your business credit card shows evidence that you pay back what you borrow.