Getting a credit card for your business is a part of everyday business. But so many consumers do it wrong. Small businessmen use their personal cards for business expenses and get confused and out of sorts. There a lot of cons to attaching business expenses to a personal credit card. There are nuances and finesses for using credit cards for business expenses that the savvy small businessman has to be aware of.

Don’t Get All Mixed Up

Bundling up personal expenses with business expenses under one card is a major faux pas. This small business no-no is one that too many make. Accounting problems can occur because your accountant will have problems differentiating the personal expenses from the business expenses. If you have a sole proprietorship, this kind of mixing is fine. If you switch over to a limited liability company (LLC) or official business corporation, then you will have to keep personal expenses and business expenses separate. It’s a good idea to get a small business credit card now and just keep it for awhile while you’re waiting on the company to start.

Debts From Business Could Go On Your Personal Credit Report

Most businessmen pay their debts in full and they do so quickly. But for those that don’t, their debt can appear on their personal credit report. Any big jump in debt, whether it be from a business expense or a personal expense, can show up on your credit report.

Business Credit Cards Do The Work For You

When you use a business credit card, the credit card company will send you back a monthly expense report. This will help put your business expenses into neat little categories that make looking at them easier.

There Are Lots Of Options To Choose From With A Business Credit Card

Most credit card providers issue several different types of business credit cards. There are different business credit cards for each type of business owner. Small business owners may have one credit card, and corporations may have another. They are safer than storing a large amount of petty cash on site. You can get a selection of business debit cards with PINs given to special employees. Plus, you get itemised monthly statements.

What Are Some More Benefits Of Business Credit Cards?

Business credit cards are great for earning points on automobile gasoline, advertising, and employee expenses. But, some business credit cards give you lots of other rewards. You can get road side service anywhere you travel, get emergency money, or replacement of anything lost. You can even get insurance on rental vehicles.


Are There Different Types Of Cards For Large Corporations?

Small businesses have one thing to worry about, and that is turning a profit. Large corporations, on the other hand, have a lot of other considerations. There are so many things to manage that it can get confusing. They need high-level credit cards to assist them with business expenses. For example, certain cards allow authorized employees to use them with limits on how much they can withdraw, and they are accepted at millions of destinations around the world with the larger cards which is great for worldwide business travellers like interviewers and researchers that travel around the world for a large company.

What Other Advantages Do Corporate Cards Provide?

Corporate cards allow the business holder to set spending controls to keep tabs on all their employees. There are reporting structures in place so that your organization can be clear on who is spending what and where the money is going. There is often web-based account management so you can see everything at once. There are options for billing the corporation or the individual. There is also sometimes travel insurance, accident insurance, and insurance against employee misuse.

The Final Reason To Get A Business Credit Card

Business credit cards are just easier. You know that everything you spend is a business expense. If you run a sole proprietorship, it’s very easy to get a consolidated, itemized list of expenses attributed to one card. Keep your business life business, and your personal life personal. Don’t work where you play is the old adage.

What Are The Other Advantages Of Business Credit Cards?

Business credit cards usually carry a larger annual fee, but there are also lots of other great benefits. There are usually higher limits which make business purchases easier. There is a boost in credit ratings if you work with suppliers who report to the major credit bureaus. There is a separate business credit rating so your personal credit is not on your business credit rating. You can control employee money expenditures very easily as well. There are often a lot of business perks you can get too.

Automatic Bookkeeping

If you keep all your expenses and income on one card, specifically, then you know exactly how to do the accounting when the tax time comes around. Get a separate bank account your business credit card is attached to and accept all money into that. Pay out of the same account with the business credit card. This will ensure that automatic bookkeeping is easy and simple.

Why Is It Better To Have A Business Card?

The easy itemization at the end of the year makes expense reporting easier. Sometimes, it can be a nightmare if everything is mixing. If you have a separate business card, then everyone will know you’re serious about your business, and it will add more credibility to your business. It also makes everything easier on bookkeeping employees. Building business credit is also important, and it helps establish your business as a serious one. Once your business is established, it will make transacting with merchants easier.

Tips For Getting A Small Business Credit Card

Apply at your local bank to make the card application process easier. You don’t want to mismanage your bank relationship. Everything you’ve got going for you there is a good stepping stone to start your business credit card.

This article was written by Timothy Ng. You can read more of his work at, where he has a number of comprehensive guides to all types of credit cards.

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Timothy Ng

Timothy Ng

Timothy Ng is passionate about personal finance! Check out his in-depth guide to doing a balance transfer for life where he answers everything you need to know before applying for a balance transfer credit card.