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Why business credit cards are good for business |
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Business credit cards can be vital to a new and growing business. There are many reasons why using a credit card for business purposes is more beneficial than using cheques or cash. You don't have to carry around large sums of money belonging to your company, which can easily be lost or stolen. You don't mix up your personal and business finances, as a business credit card is immediately recognisable as 'different' to your personal cards. Using credit cards is cheaper than using cheques, and money that you spend instantly appears on statements, so that you can't be caught out by forgotten amounts. Also, there is only one bill that needs to be paid at the end of each month, and monthly statements to help with your finances. Business credit cards can be vital to a new and growing business. There are many reasons why using a credit card for business purposes is more beneficial than using cheques or cash. You don't have to carry around large sums of money belonging to your company, which can easily be lost or stolen. You don't mix up your personal and business finances, as a business credit card is immediately recognisable as 'different' to your personal cards. Using credit cards is cheaper than using cheques, and money that you spend instantly appears on statements, so that you can't be caught out by forgotten amounts. Also, there is only one bill that needs to be paid at the end of each month, and monthly statements to help with your finances. The first thing that these cards provide is an easy way to make purchases and keep track of those purchases. Using a credit card means that you don't have to handle petty cash when you make an in-store purchase, arrange for invoices to be sent out or arrange accounts with service providers. Purchases can be made instantaneously 'on the spot'. These cards also negate the need for cheques, which can be costly, incur handling charges, and can take many days to clear. Some financial advisors recommend that you use business credit cards in a similar way to personal cards. For example, your business card will usually have a 0% on balance transfers period. Normally this is around a year. Many financial advisors suggest that to take advantage of these 0% periods you should seek to change cards when the offer expires. In this way you pay off balances without having to pay huge amounts of interest. Others advise caution, as too much of this type of activity can affect your chance of getting a card in the future. In the case of a business, this is less likely to be the case as card providers will often be eager to secure your business. 0% on cash purchases can also be used in a similar way. You could make a purchase on the card and then not have to pay interest on that item for a number of months. This means that you can pay off the expenditure from profit that you are receiving from an item you never had any money for in the first place. In fact some people have even used credit cards to start businesses in this way; most famously Google. It is strongly recommended, by most financial experts, that you should avoid drawing cash out of a cash machine with a business credit card. In reality there should be no reason why you would need to do so. If you do draw out money with your card you should be aware that there are normally charges for doing so and that the interest on cash withdrawals is often higher than with simple card purchases. It will be good to know that business credit cards are offered with many enhanced security features. They use the same chip and PIN technology as other cards and also have a security code on the back. Internet fraud is often covered by the card provider's fraud guarantees so that if money is fraudulently stolen it will, in most cases, be returned. Similarly business accounts are monitored by intelligent fraud protection programs, so that any unusual spending is noticed and questioned. Finally you will be able to access your company's accounts online, providing an easy and efficient way of keeping an eye on your company's finances. These online banking systems also come with a host of added features that can make business even easier. About the Author: Mark Turner writes for popular websites mostly in the financial area. Read more about business credit cards and 0 percent business credit cards here. |
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