Reasons for Entrepreneurs to Get Business Credit Cards


Brian Wallace, Founder & President, NowSourcing 

Easy access to funds is one of the most important aspects of growing a new business.  And getting a business credit card is the best way to fund business purchases and payments even when you don’t have enough cash on hand or in a bank account. there are several ways entrepreneurs can get benefits from business credit cards.

Why Get a Business Credit Card?

According to experts, a business credit card is one of the popular financial tools to fulfill business expenses and make other business-related payments. A business owner can use a business credit card to pay for utilities or raw materials when there are not enough funds in the business account. Below are some reasons for entrepreneurs to get business credit cards for smooth cash flow and better business growth.

Better Cash Flow and Financial Flexibility

Apart from the size and nature of a business, better cash flow is a key element of running its operations successfully. Thanks to the higher credit limit of a business credit card, you can use it to make business purchases, payments, and daily expenses. You can use a business card anywhere to fund business expenses and purchases even without having cash on hand. As such cards come with the large credit limit, businesses can make hefty purchases and payments without facing financial issues. However, you should choose the best credit card as per the individual needs and requirements of your business.

Separation of Personal and Business Expenses

Credit card obtained for your business allows you to keep personal and business expenses separate. it not only saves you time at the end of the month but getting separate statements also makes bookkeeping easier and more efficient. Some credit cards also come with useful financial tools that assist business owners in tracking expenses instead of saving invoices and bills in hard form. Some card providers allow entrepreneurs to integrate monthly statements into their company software and accounting tools for better record keeping.

Free Reward Points, Cash-Back, or Perks

As personal credit cards allow users to earn free rewards points and perks when used for personal payments and purchases, business credit cards do the same. For example, a business that spends lots of bucks on traveling can get a business card that offers travel rewards and points like free air mileages, discounts on hotel reservations, and access to executive airport lounges. As a result, the business can save a lot of bucks every month just by using a credit card for bookings and reservations.

Large Credit Limit

As it is mentioned above business credit cards come with a large credit limit than personal cards, businesses can fund big-ticket purchases and other business transactions without getting a loan. The higher limits of business credit cards can work as a lifeline for businesses when quick access to cash funds is required to fund big purchases like raw material or inventory etc.

Opportunity to Boost Your Credit Rating

Getting a business credit card and making consistent monthly payments is the best way to boost the credit rating of your business. This will work great when you use your credit card to make payments for vendors or suppliers that directly report to the credit bureaus. As a business card is separate from a personal credit card, making full monthly payments boosts your business credit score so you can get easy business loans in near future.

Easier to Apply than Loan Qualification

The overall process of getting a credit card is faster and easier than applying for a small business loan. This is the reason, entrepreneurs prefer applying for a credit card rather than obtaining a loan. Another best thing about credit cards is that you can use them for any (legal) purpose like paying for utility bills, inventory purchases or vendors’ payments, etc. On another hand, some business loans come with usage restrictions. A business can get a credit card within 24 to 48 after submitting the application. This provides quick access to plastic money that you can use for a variety of business purposes.

Final Verdict

Since business credit cards come with myriad benefits, one should shop around for a card best suited to individual business needs. Comparing available credit card offers is a great way to pick the right one with appropriate benefits and perks associated with the nature of your business.

Brian WallaceAbout the Author: Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency in Louisville, KY and Cincinnati, OH which works with companies ranging from startups to Fortune 500s. Brian runs #LinkedInLocal events, hosts the Next Action Podcast, and has been named a Google Small Business Adviser for 2016-present. Follow Brian Wallace on LinkedIn as well as Twitter.