Company credit cards are a great way to fund business purchases and take advantage of various rewards and perks. However, even though company charge cards have numerous benefits, it’s simple for people to abuse them. To help you to get the most out of your organization credit cards, we talked with specialists and compiled a listing of the best business credit card tips.
1. Choose the Best Business Credit Card
Evan Tarver, Financial Analyst & Small Business Finance Writer, Fit Small Business
In general, the main suggestion is to choose a business charge card
that’s rated as a top rated overall card. By way of example, the Chase Ink Business Cash credit card is one of the greatest general purpose small business credit cards in accordance with a selection of reviews. You may read our buyer’s guide about the best small business credit card to learn more.
2. Plan ahead for Future Business Credit Requires
Julie Pukas, Head of U.S. Bankcard and Merchant Services, TD Bank
Small businesses should always use a number of their slower days to consider their future credit needs. This is especially important for seasonal businesses who have to ramp up to the 4th quarter with inventory purchases. If done properly, you can use your business credit cards to fund your anticipated future demand. If you don’t, you might need to rely on a loan with greater interest.
3. Work With One Financial Institution
Brian Haney, Head of Business Products, JPMorgan Chase
It’s often beneficial to open a company credit card at precisely the same bank where you do your business banking. If you’ve got several business accounts at a single bank (including a business credit card), it’s simpler to use online tools like automatic payments and balance transfers. Further, many financial institutions will provide additional rewards and perks if you have several accounts.
4. Compare Business Credit Card Characteristics
Brandy Hadley, Assistant Professor of Finance, CSU San Bernardino
Compare all credit card attributes while looking for the right card and realize that the significance of special distinctions is dependent upon your spending habits. By way of instance, if your credit card balance is paid in full each month and you usually do not incur attention, a card rewards could be valuable. Conversely, if you expect to carry a balance, a card with a low APR is better.
5. Don’t Let Business Credit Affect Personal Credit
Gerri Detweiler, Head of Market Education, Nav
Make sure your organization credit card does not report for your personal credit. I used to have a company credit card that reported all data to my personal credit. At one point, I needed to carry a business balance for approximately a year. That business debt changed my personal credit ratings and it took me some time to recover.
6. Really Use Your Business Credit Card
Buck Stinson, SVP Small Business Cards, Capital One Spark Business
In accordance with Capital One, just 17 percent of small business owners really use a business credit card as their principal spending or funding procedure. This means that many small business owners are leaving savings and rewards on the table. Further, company owners who do not use a business credit card have trouble managing money flow since a company credit card is only paid off every 30 days.
7. Some Cards Provide Cashback for Early Payments
Deborah Sweeney, CEO, MyCorporation.com
We put almost all our company expenses on American Express cards, especially the AmEx Plum card. This card gives 1.5% automatic money back when we pay credit card bills early and saves us thousands each month. What’s more, the card will typically possess an introductory fee that gives you around $600 money back in the first 3 months.
8. Business Cards Can Fund Your Enterprise
David Waring, Co-founder, Fit Small Business
If you need less than $50k in startup financing to finance your company, a business credit card might be a feasible option. By way of instance, the average APR for credit cards is around 16 percent although some even offer 0% introductory APRs. When compared to other small business loans such as working capital loans, the cost of capital may be 3x less with a credit card.
9. Reward Employees With Business Card Perks
Bradley Shaw, Founder, SEO Expert Brad
We send an employee each quarter on a trip working with the preceding quarters’ charge card rewards. Employees have journeyed to Ireland, Japan, Morocco, Vancouver and, most recently, New York City. This has been a huge hit among our workers. The outcome, naturally, is a stronger firm culture and a better work environment that helps increase operational effectiveness and outside-the-box thinking.
10. Switch into a Corporate Credit Card
Priyanka Prakash, Managing Editor, Fit Small Business
A corporate credit card is a stronger version of a small business credit card. Business credit cards are best for businesses that have $4 million in yearly revenue, 15+ employees, and yearly credit card costs of $250k+. Should you meet those qualifications, then a corporate charge card is great as it provides you scalable fiscal controllers, lower annual fees, cash rebates, enterprise perks, and more.
11. Establish Card-Specific Spending Limits
David Kosmayer, Founder, Bookmark Website Builder
It is important to establish spending limits on specific credit cards. By way of example, senior management personnel should have higher average spending limits compared to employees. Traveling salespeople should likely have higher limits than in-office workers. This lessens the risk of unauthorized trades, particularly in cases when workers lose or abuse cards.
12. Be Cautious using Introductory Interest Rates
Inna Korenzvit, Founder, KORE Bookkeeping Solutions
Business owners sometimes like to open multiple credit cards that have 0% introductory interest as a way of short-term funding. While sometimes effective, this may also sometimes be a poor practice because higher credit card interest will eventually kick . Not to mention, opening numerous cards can negatively impact credit score and there’s an effort involved with keeping track of all of the accounts that are open.
13. Use a Fleet Card to get a Fleet of Vehicles
Jeff White, Analyst & Staff Writer, Fit Small Business
If you have a fleet of two + business vehicles that push between 1,000 — 5,000+ miles a month, it might be a good idea to get a fleet card on a general purpose credit card. This is because fleet cards typically offer tiered gas reductions that can save you more cash than a money back charge card or perhaps a gas card.
14. Use a Fuel Card for 1 — 2 Company Vehicles
Ian Atkins, Finance Editor, Fit Small Business
Fuel cards are a great alternative to fleet cards should you’ve got 1 — two company vehicles. This is only because fleet cards normally have monthly charges that are only waived if you drive 1k — 5k+ mph. If you have business vehicles with less usage, a gasoline card may be perfect for you. Have a look at our guide about the best fuel cards for more information.
15. Maximize Rewards With Segregated Expenses
Ari Socolow, Editor-in-Chief, BestCashCow
There are a ton of business cards offered with a selection of possible rewards. However, these benefits are often category-specific. You might earn 5x points onto a card for office expenses but 0 points for traveling expenses, or vice versa. This makes it crucial that you segregate your expenses so you pay costs on a card with large rewards in that category.
16. Place Recurring Expenses on a Rewards Card
Ian Wright, Creator, Merchant Machine
Ensure that you put as a lot of your recurring businesses expenses onto a rewards credit card as possible. Including things you might not always consider such as Google and Facebook ad invest, subscription payments and even site hosting and domain name renewal. The advantage is that you earn passive rewards for spending what you’d anyway.
17. Use a Credit Card to Build Business Credit
Conrad Magalis, Marketing Manager, AdvanceAcceptance
Company credit cards are often the easiest entry point for several small companies to begin establishing their credit rating. Building credit on using a business credit card allows companies to get better rates for equipment leases, loans, and other similar requirements. And other needs in the future. To learn more on your business credit score, read our guide on how company credit scores work.
18. Draft a Corporate Credit Card Policy
Emile L’Eplattenier, Head of Real Estate Finance, Fit Small Business
It’s never too early to make an internal company credit card policy that outlines rules, regulations, and best use of company credit cards. If you don’t already have a credit card coverage set up, you risk abuse and poor financial supervision, both of which may put your organization in the hole. Read our informative article on best practices for a corporate credit card coverage agreement.
19. Write Checks Against Your Available Credit
Noah Grayson, Managing Director, South End Capital
You will find credit cards that allow you to write checks from your available credit line, either for balance transfers or cash on your own. The payment is generally 2% — 5%, which is much lower compared to a cash advance against your credit card, which can cost up to 28%. The result is more charge at a lower rate, saving you money and helping your business grow.
20. Take Advantage of Cash Back Benefits
Brian Thomson, Founder, BrianThompsonlaw.com
A small business credit card that offers a cash back bonus on all purchases could be valuable to a small company. If you are able to charge your office lease, healthcare insurance, wireless phone bill and much more to your organization credit card, your own spending can easily add up to ten to twenty thousand dollars or more annually.
21. Assess Your Business Credit Report
Kerri Byron, Marketing Manager, Cortera
If you currently have a company credit card, make sure your bank card payments have been correctly reported in your 3 major company credit reports (Dun & Bradstreet, Experian, Equifax). Attempting to do so can radically affect your business credit rating. You’re able to read this supreme guide on business credit reports for more information.
22. Do not Forget About Additional Payment Options
Bob Tankel, Founder, Tankel Law Group
There is a war raging for internet funding choices. Paypal Credit, for example, provides lines of credit with 6 months of 0% interestrates. It is possible to get a credit decision in as little as 3 minutes and there’s typically no annual fee. Further, PayPal also offers more powerful financing options that could assist you with larger working capital purchases.
23. Don’t Commingle Private and Company Expenses
Craig Cody, President and Founder, Craig Cody & Company
If you use your business credit card for personal use, or if you use a private bank account for business transactions, your personal transactions will factor in to your business credit score. Ensure you place all your business expenses on a separate charge card to keep private expenses from being commingled with business expenditures.
24. Think about a Company Charge Card
Carson Yarbrough, Marketing, Creditcards.offers.com
Business charge cards are business credit cards which typically do not have a spending limit. This means you could use a charge card that will assist you purchase equipment, pay vendors, and purchase inventory without worrying about running out of charge. This is a huge advantage for a growing business. However, business charge cards usually require that you pay off your balance in full every month.
25. Check to See if You have a”Grace Period”
Matthew Coan, Founder, Casavvy.com
A grace period is a span of 10 — 20 days after your credit card invoice is due. Sometimes, company charge cards will give you a grace period where they do not charge you interest for an outstanding small business credit card statement. This could help you manage cash flow and prevent any late fees or interest payments.
