A whole lot of small to medium-sized companies use credit cards in the course of business. The problem is, many make the mistake of using their personal cards. A large couple of major problems with this: fusionex
First, if you use your personal bank cards for your business you are blurring the line between business and personal finances. The better separation you can perform between your business finances and private finances, the better off you’ll be. For this reason, a credit credit card in your business name is the best course.
Second, using your personal cards for your business puts your personal credit at risk. In the event the financial debt belongs to the business, shouldn’t it be on the business’ credit?
Just about all people don’t think this is a major deal until they run into problems with no longer have their personal credit to land back on.
In one example, a couple in corporate together racked up over $100, 000 of personal debt on their personal credit for business. The moment the business’s income lowered, even though the business i visited first able to stay afloat, the few was forced to seek bankruptcy relief.
With their personal credit destroyed, they could no longer get credit to support the business–and the business proceeded to go through some serious battles as a result. The stress took a fee, and the couple is now divorced. Perhaps things might have gone in different ways if they had relied on business credit alternatively than their personal credit.
Maybe you’re convinced that your company won’t have difficulty, or that you avoid use credit cards much anyway. What’s the point, then?
Using a business credit card in your business does offer some real advantages aside from the two that were already mentioned. For example:
1 ) Streamline businesses and automate expense traffic monitoring. Paying expenses can be much better to manage with a business card, and reports can be made monthly or annually in many cases to help categorize and analyze expenditures.
installment payments on your Business cards have “rewards” programs too! If you have a lot of regular monthly expenses for your company that can be paid with a rewards card, it would be easy to get $500 to $1000 every year (or more) in cash rewards, or even free airline tickets if you utilize a travel rewards credit card.
3. Manage employee spending. Business credit cards can be set up to have spending limits for employees, which can help in managing expenses for in-the-field employees.
4. Applying a business card helps you build credit for your BUSINESS, which features utmost importance in modern-day economy.
As you can see, there are several big advantages to using a proper business credit credit card for your business.