Small Business Credit Cards: 7 Myths Debunked

By: Max Anderson

Small business credit cards are everywhere and the top credit card companies are offering cards to meet almost every business need. The problem is that small business credit cards are some of the most misunderstood credit cards on the market.

Let's take a look at some common misconceptions and debunk some of the most popular small business credit card myths.

1. No Credit Necessary

Many people assume that their personal credit history really has no impact on their ability to qualify for small business credit cards. This couldn't be further from the truth. Unless you have a large, well-established business with a significant credit history of its own, you're going to need your personal credit history to guarantee the small business credit cards you apply for.

Credit card companies will be running your credit report when you apply for small business credit cards and you will often be required to provide your personal information, such as your birth date and social security number.

2. Broader Spending Limits

If you assume that you'll get a fatter credit limit with business credit cards, you may want to think twice.

Whether you're applying for a business credit card or a personal credit card, your credit limit will likely be the same depending on how your credit rating is. The better your credit, the more you'll qualify for.

If your credit is damaged, don't expect to get small business credit cards that have credit lines with thousands or tens of thousands of dollars.

3. Big Business Only

Some people assume that business credit cards are only for businesses with substantial revenue and established credit histories. However, business credit cards can be used for any size business.

Even the owners of the smallest business can benefit from business credit cards. You may be required to guarantee the credit line personally (which can affect your personal credit history), but you will be able to begin building your businesses credit.

4. Higher Interest Rates Apply

Some business owners shy away from business credit cards because they believe that they will be charged a higher interest rate.

This just isn't the case.

Many small business credit cards offer very competitive interest rates, and some even offer extra perks such as points programs and access to discounted products and services for your business needs.

If you've been worried about the interest rates associated with small business credit cards, a little investigation into current offerings may surprise you.

5. The Confusion Factor

Some people think that managing business credit cards in addition to their personal credit cards will prove to be too confusing. In reality, it can make things much easier.

Using small business credit cards will allow you to keep your business and personal expenses separate, which can prove to be a lifesaver when it comes to accounting and tax time. If you're avoiding business credit cards because you are afraid it will complicate things, do yourself a favor and give business credit cards a chance.

6. A Loss of Control

Many business owners are afraid that having a business credit card will mean that employees can use the card, and that may mean a loss of control over the business expenditures.

This couldn't be further from the truth. Company employees are not allowed to use business credit cards without the express consent of the person responsible for authorizing their use and the only employees who will have access to the business credit cards are the employees you add to the account and give the cards to.

7. It's Not a Necessity

If you're among those who believe that small business credit cards are a luxury, you need to adjust your perspective.

For a business to thrive in the long run, it must have at least one or two business credit cards for business expenses. From purchasing supplies to subscribing to services, small business credit cards can help your business obtain the tools it needs to grow.

Do You Need a Small Business Credit Card?

By: Max Anderson

So you've recently started a business and you're wondering if you should apply for a small business credit card... Whether or not you need (or are even ready for) a small business credit card can be a big decision. Make sure you make the right one by asking yourself these four questions.

1. How Old Is Your Business?

When considering whether or not to apply for a small business credit card, you should first look at how long your company has been in business.

If you've been in business for fewer than six to twelve months, you may want to wait a bit before applying. However, if your business is out of the "first-year danger zone" you may indeed want to consider getting a credit card in your business's name to help your company's growth and prosperity.

2. How's Your Credit?

Unless your business is very well established, chances are you're going to need to personally sign and be responsible for the small business credit card you obtain for your company. Because of this, you need to evaluate your own credit situation before applying for any business credit cards.

If you have good credit, you really have nothing to worry about. There will be a wide variety of small business credit cards for you to choose from. However, if you have some credit issues, your options will be limited and you may need to apply for secured business credit cards until you are able to improve your credit rating.

3. Can You Afford It?

Another big question that you really need to ask yourself when applying for a small business credit card is whether or not your business can afford to have one. Someone is going to have to pay the bills when the statements come in every month and if your business isn't generating enough revenue, you're going to have to foot the bill.

4. What Kind of Small Business Credit Card Do You Need?

If you have asked yourself the above three questions and have decided that a small business credit card is in your company's best interests, you need to determine what type of business credit card will best meet your needs.

If you plan on paying your balance off in full when the bill comes in each month, then you should look into business credit cards that offer rewards. However, due to their higher interest rates, rewards cards aren't a good option if you plan on carrying a balance. If you plan on carrying a balance, opt for a low-interest card instead.

Deciding whether or not to apply for a small business credit card doesn't have to be hard. Determining where your business stands and what type of small business credit card you need are both critical steps towards finding the business credit cards that will best serve your needs.

Top 4 Credit Card Benefits For A Small Business

By: Andrew Jamaz

A business credit card offers many benefits to a small business. A business credit card helps to keep business and personal expenses separate. Having a credit card solely for business use can make a lot of difference in the business finances. Many small business owners do not understand how beneficial a business credit card can be.

Establish Credit And Creditworthiness

Just as you personally want to establish credit, your business needs to establish credit. It is common for small business owners to use their personal credit for their business credit, but this can get rather tricky. When it comes to taxes and financial liability it is much better for the business owner to keep personal and business credit separate.

Easier Accounting Saves Hassles

A business credit card will help simplify accounting. There will be no need to sort through papers to figure out business form personal expenses. Using a credit card, the purchases for the business are all in the statement. These figures can be easily transferred to the books. This helps to make accounting much easier by keeping expenses streamlined.

Simplified Spending

A small business owner may find himself having to okay purchases or write out checks for purchases made by employees. With a business credit card, the owner can get additional cards for those who have spending power. This will help cut down on time wasted getting purchases approved and also save money because far less checks will have to be written. It will make the business more efficient.

Reward Possibilities

There are many credit cards that offer rewards for purchases. With a rewards card a business owner can get an additional incentive by earning things like free airline miles, gasoline and even cash back on purchases. This is something that can be very helpful to a small business. Rewards are earned through purchases, so a business is earning something for money they would have spent anyway. It is like getting double for your money.

Business credit cards are a great idea, especially for small businesses. Many small business owners do not understand just how beneficial they can be, but as you can see they offer many perks. A small business owner would be very smart to get a credit card that will make it much easier on them in the long run. They will find they save money, save time and make the business more efficient and run smoother.