Small Business Credit Cards: The Facts

During the infancy of credit card development and expansion, credit card companies pretty much ignored the small business market. It was thought that since small businesses have a high probability of failing, it was not worth investing in them. Then credit card companies woke up and realized they were missing out on niche market that was growing by the day. This realization resulted in the small business credit card, a type of credit card any entrepreneur with a legally established business may acquire. Some of the main features that set small business credit cards apart from regular credit cards are: 1. Management of Business Funds As long as a small business credit card is used exclusively for business expenses, record-keeping is not only easy for the small business owner but also for the IRS. This is because during tax time all a person has to do is provide copies of the statements acquired from their small business credit cards along with any additional receipts. From these records the IRS can clearly see what can be deducted. With a personal credit card, the small business owner must sift through which purchases went toward their business and which ones didn’t. 2. Employee Credit Cards While personal credit cards do allow for more than one person to use them, no small business owner in their right mind would trust their employees with a credit card that is associated with their personal funds. This leads to another reason why a person should get a small business card… the ability to issue separate business-related cards to employees. 3. Higher Credit Limit Personal credit cards have limits that hover around a few thousand. Only extremely wealthy individuals or those with superb credit can get limits that are tens of thousands. Everyone else must settle for a lower limit or, (if they’re a small business owner), opt for a small business credit card. Since most credit card companies understand business expenses will be more expensive than personal ones, they allow for a significantly higher credit limit than they would if the card was designated for personal use. 4. Value Added Tax Not all small business credit cards offer this, so entrepreneurs need to be on the lookout for this perk when applying for their cards. But anyway, with value added tax, small business owners can recover any monies spent on foreign taxes. This benefit is essential if a business owner does a lot of spending overseas. 5. Insurance Small business credit card tend to offer more generous insurance than their personal counterparts. Examples of the types of insurance one can acquire with a small business credit card include: car rental insurance, travel insurance and purchase insurance. 6. Earn Rewards Earning reward points and benefits while making potentially necessary purchases for a business can be a very enticing motive. Many card issuers design the reward programs to benefit the small business needs. Still, several issuers make available a variety of perks that used by any individual, regardless if the purchases used to earn the rewards were for business use. Cash back and airline miles a long with general point redemption programs are some of the most common reward features. A small business credit card is an excellent choice for entrepreneurs looking for a convenient way to make purchases for their business. The list of advantages of small business credit cards are many, with there being virtually no disadvantages, (other than having to own a legitimate business to qualify for one). When it comes time for selecting a credit card for a small business, weigh the needs of the business and compare the rates and fees of the various cards available.