29 Jul What are the things to consider before getting a business credit card?
Perhaps, the most advantageous proposition for acquiring a credit card in the name of your business is that you are able to keep your personal and business expenditures separate. If you maintain a corporation or an LLC, this legal entity must remain separate from what you personally consume. Let’s consider other factors that show how keeping a separate credit card for your business keeps your costs in check.
Your business credit may not be dependent on your business credit card
Consumer credit agencies usually receive a report on payment activities from the issuers of the more popular business credit cards. Some business credit reporting agencies usually don’t get such a report from other card issuers. So, your company’s creditworthiness may not be substantially established through a business credit card.
An unsecured business credit lines program submits payment activities only to business credit reporting agencies. This can be considered because the cards from other issuers may still influence your own personal credit standing. The goal is to keep business and personal separate.
Try to keep your personal credit personal
What you spend on your company’s needs may in some way be reflected in your personal credit activity. Large purchases may unduly impact your own personal credit score. These business purchases still appear on your personal report even if it was stated to be for business purposes.
Do your best to search for card issuers who do not submit such reports to consumer credit agencies. The company’s credit profile gets more established because only business credit agencies are privy to such reports. Get more information about that unsecured business credit lines program so you can apply this to your advantage.
Look through the different types of business cards that are available in the market
Because of varying marketing strategies, business credit cards come in various shapes and sizes. Some offer a 0% intro APR on purchases, while others are reliant on your frequent flier miles. There are low-interest rate cards and cards that grant rewards based on accumulated points.
Choose the business credit card that best works for your company’s regular expenses. If your people need to travel a lot, or acquire items from a particular chain or need a bump in their representation allowances, then you are able to find a card that gets you the most bang for your buck.
An established credit file is not a requirement for qualification with regard to your business
Business credit cards are heavily reliant on the strong personal credit of the stakeholders. This mostly applies to startups and businesses that still do not have business credit files. The banks lean on the personal credit track record to ease their risk when issuing such business credit cards.
The credit to be given or to be awarded is reviewed by the bank and personal credit files of the personal guarantor are assessed and processed. This establishes the business credit file so that it can substantiate a formal report to business credit agencies.
You’ll probably be allowed to spend more on your business credit card
Because you need to invest in office equipment or efficiently stock up on inventory, large purchases are to be expected. That’s why business credit cards allow you to do so and provide you with that necessary leverage and flexibility.
Please make sure you get a business credit card with your company’s name on it. That further defines what you actually spend in terms of business expenses when it’s placed on this card. This will help you separate from what you spend on yourself
Download this Infographic