Pros and cons of having a small business credit card

A credit card is a form of plastic money. It is issued by a bank to its users to enable them to pay to a merchant for goods and services. Business credit cards are the ones that are intended to be used by an individual for business purposes rather than for personal use. As a small business owner, a person may own more than one credit card for different purposes in the business.

Having a credit card for business purposes may make it easy for businesses to manage their expenses and to keep track of all the expenditures. While business cards may be useful for many reasons, they do lack certain perks.

This article provides you with the pros and cons of small business credit cards.

Pros of small business credit cards

  • Easy qualification
    One can easily apply for business credit cards than a loan from the bank. If your business is well established in the market, then most of the credit card companies will easily provide you with business credit cards.
  • Credit rating boost
    Having business credit cards will help in boosting ones credit rating because it will ensure that the payments are made on a timely basis. It will be helpful to do business with those suppliers who will put in a good word for you to the credit bureaus.
  • Separate business credit
    A business credit card stands out on its own and does not show your personal transactions. Moreover, your personal credit transactions can easily be separated from the business ones without any confusion.
  • Business perks
    Another advantage of having a business credit card is that it offers you different reward related to business such as discounts on business travel or shopping at business supply outlets and many more.
  • Access to easy financing
    Small businesses often need access to cash, and it might sometimes become bothersome. A business credit card may help small businesses to overcome this problem by ensuring easy access to cash for supplies, equipment or capital improvements.

Cons of small business credit cards

  • High priced financing
    Business credit cards are an expensive way of financing. Businesses might pay high interest rates and may even end up paying more for just owning the card.
  • Less purchase protection
    Banks provide protection in case of personal credit cards, but they may not do the same for business credit cards. This may lead to some problems for businesses with respect to making some changes in the transaction or correcting billing errors.
  • Security issues
    Business credit cards are not fully secured. Employees might take advantage of a business credit card if its transactions are not completely monitored. Business credit card must be kept safe, and information regarding the credit card number should be provided carefully.

A business credit card can only be advantageous if handled carefully and if wise decisions are made. With the help of business credit card, one might be able to maximize the benefits of his/her company.

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