Startups are the new craze and everybody is going along with it. But, starting a startup is not an easy task. You have to go through a lot of grueling tasks and have to endure a lot. But, The most important thing is funding and a quick injection of money that will revive the business when it needs it. Credit cards are getting more and more popular with startups and with the advantages they provide, it is only natural. In this article, we will explore the advantages that a small business credit card can provide you and how you can maximize them.
Advantages of Small Business Credit Card
Making a smart decision is an important move when you are starting your business. Getting a credit card is one of them. If you think why you should need a credit card, take a glance at the advantages a small business card can offer you.
Simplify Cash Flow
Small business credit cards offer a line of credit that can be used to buy anything you need for your startup. You can buy supplies and equipment with it!
When you start a business, you might be in knee-deep financial expense. As a rule, you have to spend money to earn money. But, what if you don’t have that money? A credit card offers you just that. You can easily use a credit card to buy the things that you need for your business without burning a hole in your pocket.
Many cards also offer interest-free financing so you can pay them over a long time without the interest.
Cut down on employee costs
While managing a business, you may have to instruct your employees to bring something for the business. But, it can be a bit tedious to reimburse the employee for business spending on a personal card. Fortunately, A business card solves that problem.
Employees can use the card for business expenses and you will get a bill with all of your monthly spending. You can also set spending limits and freeze the cards if needed. This reduces the financial mismanagement that can occur and fosters a good financial grip on the scenario.
Gain Access to Account Management Tools
Most business cards provide quarterly and annual summaries, you can also export purchase information to accounting tools like Excel and Quickbooks. This allows you to easily manage your expenses and simplify your finances throughout tax season.
After registration, Amex business cards allow you to review a year-end report and send transactions to Quickbooks daily. Capital One business cards enable you to easily examine recurring transactions, generate a year-end summary, and download purchase details into Quicken, QuickBooks, and Excel. To make accounting easier, Chase business cards include quarterly reports and connectivity with bookkeeping software.
Higher Credit Limit
Small business credit cards increase your spending power. While a personal credit card has a limit of $22,000, a business card allows you to have a $56,000 limit!
When a business is going through a rough phase, you can use the card to pay invoices, manage payroll, and cover any unforeseen expenses. You can also use the business card for improvements, additions, and new ways to sell.
Convenience
Business credit cards are also very easy to carry. Think about it, you can easily carry a credit card that has a limit of $56,000 than carrying cash. Your cheque will not be a good option if you have to make a quick payment. Also, Credit cards are a must if you need to make an online purchase. So, credit cards are a good option to follow in the modern cashless economy.
Easier than getting a loan
More than often, the process of getting a business credit card is quite quicker than getting a small business loan. The loan also needs quite a lot of collateral which is required by the banks. The process is not helpful if you need a quick flow of cash in your business. On the other hand, a credit card provides you with the quick flow you need.
Creating Company Credit
Building a good payment history can help your business get and keep good credit. Improving your credit score can help you get more loans at lower interest rates, and lower your insurance costs. It even makes it easier for you to rent an apartment. The same goes for your business credit. Even if a company is set up as an LLC or a corporation, loans to the company are often backed by the owners of the company. People may not need to give personal guarantees once the business establishes a good credit background.
Earn Rewards
A lot of business credit cards offer you a rewards program that helps you to earn cash back, points, or miles. All the rewards that you make on your business card account, will help you to earn rewards. Purchases made by your employees will also be included in earning rewards. You can use your rewards in many ways, such as to get merchandise, trips, or credit on your bill.
Better terms
Business credit cards have better terms compared to personal cards. This includes low-interest rates, higher credit limits, longer periods of repayment between loan windows, and discounts on early payments.
Welcome Bonus
One great thing about applying for a business credit card is that the welcome gifts are often just as good, if not better, than those for personal cards. It may sound surreal but it is true!
For instance, the Chase Sapphire Preferred® Card gives an extra 60,000 points to new cardholders who spend $4,000 on purchases in the first three months after starting their account. It costs $95 a year.
A $150 annual fee covers the Hilton Honors American Express Surpass® Card. After you spend $3,000 on purchases with the card in the first six months, you’ll get 170,000 Hilton Honors bonus points as a welcome gift.
Protection from Fraud
Credit cards give you fraud liability protection. You are covered when your card gets lost or stolen. You can sign up to receive personalized mobile notifications for transactions and security breaches. You can also set card controls to lock and unlock cards. Now, you can check recent transactions and more with the help of mobile apps.
How to Maximize Your Business Credit Card
Owning a credit card will not automatically grant you all of these advantages. You have to know how to maximize the card to reap your benefits. Here are some tips to maximize your business cards:
- Make sure to buy the right credit card. Research and make sure to compare different credit card that suits your needs. Look out for cards that have valuable rewards and extra perks that may benefit your business.
- Make sure you pay off your amount in full and on time every month. This will you avoid high interest rates and keep your credit score high. Also, It will get you the most out of your cashback and credit programs.
- Review your credit card bills to keep track of your spending, spot any suspicious charges, and make sure you are not striking beyond your budget.
- Enjoy the perks your business credit card has to offer, like travel insurance, purchase protection, and special events or discounts. If you hand out credit cards to your employees, make sure they know how to use them responsibly. This will keep the business credit card from making any unnecessary purchases and stop anyone from spending money without your permission.
Best Small Business Credit Cards For Startups.
To help you choose among a huge number of credit cards, we have compiled a list of all of the best small business credit cards for your startup.
American Express Blue Business Cash™ Card
Considering there’s no annual fee, the American Express Blue Business Cash™ Card pays off for business owners who spend $50k or less per year. Just don’t use the card overseas, as the foreign transaction fee eclipses the cashback rewards.
Ink Business Unlimited® Credit Card
Busy business owners will appreciate this card’s simple flat-rate rewards program which doesn’t require time to manage and optimize. It also offers you unlimited 1.5% cash back rewards on purchases, no annual fee, and a generous welcome bonus
Ink Business Preferred® Credit Card
This card offers a remarkable welcome bonus, no foreign transaction fee, employee cards at no additional cost, and rewards for common business expenses
Ink company Cash® Credit Card
It doesn’t cost anything to have the Ink Company Cash® Credit Card. It also doesn’t charge the fee that some company credit cards do for employee cards. You’ll get 5% cash back on up to $25,000 spent at office supply stores and 1% cash back on internet, phone, and cable services every year.
Conclusion
Small business credit cards help you to keep your business afloat and navigate problems that you may face while opening your own business. Make sure that your credit card is safe and don’t get hurt by it!
