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Credit cards have become an essential part of our lives for a long time now. While for some they are a mere convenience, for others they are an extended source of capital. However, for entrepreneurs, they are a source of attractive rewards, fraud protection, and above all, ease of business payments.
Business credit cards are in great demand and for all the right reasons. They are an upgrade of personal credit cards and offer great value to business owners.
Reason why to Use Business credit card instead of Personal Credit Card
1. Report business expenses separately
For sole proprietors and small business owners, having a business credit card means keeping personal and business expenses separate. This saves time and effort (that you would otherwise spend on looking at long statements) and makes your tax reporting & yearly expense management less complex. Failing proper reporting, heavy usage on personal credit cards is often followed by audits.
Some business cards also offer online tools that can help you track your charges — a lot simpler than keeping a year of invoices and bills offline and on Excel!
2. Rewards & cashback
Business credit cards usually have some extraordinary advantages, intended to provide value to business owners, in addition to free credit and universal payments. These advantages are unique as compared to the rewards offered by personal cards.
Some business cards give cashback, while most of them offer attractive signup bonuses for business services and products. Advanced corporate cards also offer variable cashback on choosing a flexible repayment cycle.
3. Protection against fraudulent transactions
Business credit cards give you great protection against fraud. Many companies offer coverage for fraudulent transaction charges, and the cardholders must pay only a small amount in case of frauds, taking away much of their risk.
Business debit cards, however, don’t always offer such assurance, therefore corporate card is a more evolved and protected form of payment for most businesses.
4. Financial liquidity
Cash flow is often a challenge for business owners as most of the money keeps floating in the market. Business credit cards offer a rotating credit extension that can be utilised when you have to make a large purchase for the firm, when the business is struggling, or when your finances are tight.
You can also pool your own capital with a credit limit to spend higher than individual amounts available to you, by just loading the card upfront.
5. Control employee spending
For businesses where employees travel for work, make purchases of stock or supplies, or have other functional expenses such as marketing and cloud infrastructure, a business credit card can assist you with keeping track of all those expenses and the amount they are spending.
You could likewise set spending limits for individual cardholders in order to control their spending. RazorpayX Corporate Card will also allow you to set limits on the nature of expenses such as marketing or stock purchase.
6. More benefits than your personal credit card
Business credit cards have preferable terms over personal cards, including higher credit limits and the ability to expand your credit cycle. Unlike personal cards, they keep up with the growth of your business and not your take home.
Some permit cardholders to convey an equilibrium for as long as 50 days with no interest, while others offer a markdown if you pay early. Corporate Cards also offer better foreign transaction charges compared to personal cards.
7. Improves credit score
With timely payments and repayments on your business card, you will keep getting better at your business credit score. While you ideally have a high personal credit score when you apply for the card in any case, when that business card arrives, its whole record sits separate from your own personal credit.
As and when your business succeeds, and you apply for loans for fixed capital or stock, banks will look at your business credit score while deciding, and the higher your score is, the better rates you’re going to get.
Frequently asked questions on Business cards
1. Can start-up founders or small business owners also get a business credit card?
If you are unsure whether your organisation is qualified for a business credit card, the only answer is yes.
Basically, if you have a business that transacts products or services for money, you have all the reasons to apply for a business card.
2. Which business credit card is suitable for you?
Once you have decided to apply for a business credit card, you must evaluate your options carefully as different card providers offer different value for money. Find out what are the significant things that you spend your business income mostly on.
While shortlisting the cards, identify how many transactions you can move to your credit card and what advantage would it give. Additionally, consider the expenses and fees related to each one of the cards. Then you can consider additional advantages as mentioned above to find out the best business credit card for you.
3. Is personal credit history important for applying for a business credit card?
One of the main criteria for applying for a business card is your personal credit history, which incorporates your own financial assessment. The card provider will use this data as a reference and find out your eligibility.
Do you still use your personal credit card for business expenses? If so, it’s time for you to move on to a corporate credit card! Get one today.