Top 3 Benefits of Business Credit Cards

Whether you’re a start-up or have hundreds of employees, it’s important to manage your business’ finances. Having a company credit card is a great place to start, as it ensures that your business transactions are kept to that card only, helping you keep track of expenditure clearly without company outgoings getting tangled with personal transactions. If you’re still unsure about the benefits of implementing business credit cards, here are three key reasons why we’d recommend them for all businesses.

1. Manage expenses

We’ve touched upon this in a roundabout way already, but this reason needs to be emphasised because it’s so simple and obvious. Business credit cards make sense purely because you can monitor exactly where your business’s money is going, when, who to and why. This includes everything from paying the rent for your office space to buying teabags for the break room. A credit card will also enable you to iron out any company-funded snacks – allowing more money to be spent on improving your services and less on lunchtime trips to KFC.

Furthermore, a business credit card greatly simplifies the process of tax returns. With all your outgoings in one place, your accountant will easily account for everything without having to work out what was paid for by which means. Of course, having everything paid for with one card also allows you to evaluate where you could save money, which is essential to any business to avoid the prospect of debt.

2. Gain rewards

Having a commercial credit card enables you to reap its benefits before you even consider your own expenditure. Rewards programmes are ideal for this, offering you a point accumulation system with every pound spent on that card. Schemes vary, so it’s best to do your research, as if you’re an international business then tickets for flights could be a useful bonus, but if you could do with the extra finance push, then some rewards programmes do offer cash.

It’s important to remember to thoroughly weigh up these benefits prior to implementing a business credit card, as annual fees can cut into any bonuses you receive significantly. Do the maths, and if it doesn’t add up, then forget about it and find a card that works for your company.

3. Build credit

All businesses have a credit score, and yours is no exception. By having a business credit card, regular usage can build positive business credit, demonstrating to potential future lenders that you’re a reliable firm. Without a company credit card, lenders will look at your personal financial situation and history to establish whether you’re likely to pay back money or not, which is a risky move. With a business credit card and a company history of regular payments, if you need to take out a company loan, such as a deposit for a new office space, then banks will immediately have the confidence in you to lend – making the process much less hassle for you. See our guide on how to improve business credit.

With the above points in mind, business credit cards seem the obvious choice for all businesses as the way to monitor their finances. The benefits far outweigh any downsides such as fees as, ultimately, submitting your tax returns will be made much simpler; you won’t have to worry about keeping track of every penny so keenly; there’s the potential for extra bonuses and your company’s credit score will look good.

If you’re concerned about your company’s credit prior to obtaining a business credit card, contact Creditreform today. Our team can advise you on any steps you need to take.

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