The business credit card could be a great acquisition for your small or home-based company. There are many benefits to using one, including keeping track of company expenses and cash flow, simplifying accounting tasks, and receiving discounts on business related products and services such as printing, publishing, car rental, flights, hotels, professional organizations and many more. Of course, it is not written in stone anywhere that you must use one, but when you consider the advantages that having a business card offers, you’re likely to see that it is almost a necessity.
The primary reason that many business owners apply for a separate business card is to help keep track of business expenses, and to create a clear separation between personal and business charges. This in itself is a great benefit, because it will prevent a small-business owner from having to charge office supplies, airline tickets, computers or other equipment on their personal credit card. Keeping your business and personal credit card expenses clearly separated is absolutely necessary unless you’re trying to make your tax return as complicated as humanly possible and invite an audit. Remember the three word rule: “keep ’em separated.”
Another big advantage of using a one is being able to instantly see all of your business expenses in one simple report. This also is a great help at tax time, because you can simply go through your statements to easily determine which items are a tax deduction, and which are not. These days, many small-business credit cards even come with their own software applications, to help the business owner keep track of tax-deductible expenses.
While there is no doubt that using a business card can simplify your accounting chores, there is another very important reason to apply for one. In general, a new business will have no credit history at all. Even though the proprietor of the business may have a long and distinguished credit history, this will not directly transfer to the businesses credit rating. By acquiring a card in the name of your company, you can begin building good credit for your business.