While a business credit card can be a valuable tool in managing your business expenses, there are pitfalls to avoid. Being aware of the traps can help you manage your business income more wisely and find the best cash-flow solution.
What Is a Business Credit Card?
A business credit card is a line of credit for your business expenses, allowing you to maintain business operations despite seasonal peaks and troughs.
Business Credit Versus Personal Credit Cards
Much like a personal credit card, business credit cards can offer competitive interest rates as well as other options such as reward points and interest-free periods.
However, unlike personal lines of credit, business credit cards can often feature a higher annual fee, minimum income requirements, multiple users and no preset spending limit.
Many business credit card statements have downloadable formats such as PDF and Excel, as well as a breakdown of GST for tax purposes. This is a great advantage, allowing you to integrate your monthly account statements into your accounting management software, such as QuickBooks Online, for easier tracking and finance management.
In addition, many business credit cards can allow you track business spending cycles and trends to assist you in managing your budget. Another prevailing feature of a business card is the fact that liability for the debt can be either personal or joint and several, depending on the card you apply for.