When starting a business, one of the first things you need to do is apply for a credit card. Why? Because businesses come with a lot of expenses, both immediate and ongoing, and you’re going to need to build credit to cover them all. Depending on the type of business you have, though, you’ll want to select a different card.
Here’s how you can make sense of it all.
Let’s just start right out with the different reasons, shall we?
The Credit Booster
The primary reasons to get a business credit card are to separate personal and professional expenses and to establish a business credit score, so if you run a small, solo operation, you can keep things simple. You don’t need a credit card with a dozen added features or points for services you won’t use. Instead, opt for something that will help you build credit while establishing your business, like the Amex Blue Business Plus card, which offers 0% APR for the first 15 months. You’re likely to have a lot of expenses during that period, since you’ll need to invest in office equipment; plus this business-focused card offers overage flexibility in case of emergency expenses.
Add On Employees
Another reason you should apply for a business credit card is that if you have employees, you don’t want to be stuck being the only one who can go to the store or be forced to loan out a single credit card all the time.
With a business card such as the Visa Business card or Commerce Bank Business Rewards card, you can add additional employee cards at no extra cost. It may seem like a minor convenience, but having employee cards allows you to avoid cumbersome reimbursement procedures and better track business expenditures.
Benefit By Traveling
There are lots of companies in which employees never travel, especially if you run a local business, like a café or even an online business, but if you own a tech start-up or travel frequently to meet with clients, then you’ll want to have a credit card that rewards you for that. For example, the Capital One® Spark® Miles Select for Business card offers airline miles based on purchases, even non-travel related ones. Alternatively, if you’re loyal to a specific airline, you may want to get a dedicated business card through that company for professional travel.
Get New Tools
Finally, when you apply for a business credit card, you’ll often gain access to a variety of new tools that can benefit your business and help you to save time. You may be granted special access to other financial products beyond credit cards, a popular perk with Chase cards, be able to use special checkout tools that speed customer transactions, and your business card can even help you keep better records for tax-related purposes.
Though you may have to offer a personal guarantee on your first credit applications, these tools can open up enough doors to make you a stand out applicant for other cards and financial products down the line. In other words, it’s worth taking that first risky step.
Starting a business is exciting, but it comes with many costs – which is why you need a business credit card. By covering your expenses with a specialized card, you’ll help develop your reputation for financial responsibility, without facing added personal debt. Most importantly, though, business credit will grow with you if you choose the right card to fund your dreams, so do your homework and get ready for success.