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Why You Need A Business Credit Card

A lot of small to medium-sized business owners use credit cards in the course of business. The problem is, many make the mistake of using their personal cards. There are a couple of major problems with this:

First, if you use your personal credit cards for your business you are blurring the line between business and personal finances. The better separation you can achieve between your business finances and personal finances, the better off you will be. For this reason, a credit card in your business name is the best route.

Second, using your personal cards for your business puts your personal credit at risk. If the debt belongs to the business, shouldn’t it be on the business’ credit?

Most people don’t think this is a big deal until they run into problems and no longer have their personal credit to fall back on.

In one example, a couple in business together racked up over $100,000 of unsecured debt on their personal credit for their business. When the business’s income dropped, even though the business was at first able to stay afloat, the couple was forced to file for bankruptcy.

With their personal credit destroyed, they could no longer get credit to support the business–and the business went through some serious struggles as a result. The stress took a toll, and the couple is now divorced. Perhaps things might have gone differently if they had depended on business credit rather than their personal credit.

Maybe you’re thinking that your company won’t struggle, or that you don’t use credit cards much anyway. What’s the point, then?

Using a business credit card in your business does offer some real advantages aside from the two that were already mentioned. For example:

1. Streamline operations and automate expense tracking. Paying expenses can be much easier to manage with a business card, and reports can be generated monthly or annually in many cases to help categorize and analyze expenses.

2. Business cards have “rewards” programs too! If you have a lot of regular monthly expenses for your company that can be paid with a rewards card, you could easily get $500 to $1000 per year (or more) in cash rewards, or even free airline tickets if you use a travel rewards card.

3. Manage employee spending. Business credit cards can be set up to have spending limits for employees, which can aid in managing expenses for in-the-field employees.

4. Using a business card helps you build credit for your BUSINESS, which is of utmost importance in today’s economy.

As you can see, there are several big advantages to using an actual business credit card for your business.

A helpful hint for those wishing to establish business credit: Try to get approved based on your business’s creditworthiness rather than your personal creditworthiness.

This means avoid providing your social security number on credit applications for your business credit card. If you don’t get approved based on your business credit alone, then you can try applying and include your personal credit information as necessary.

Help to Start Up My Own Business

You’ve ended up at this article because you are looking for help to start your own business. You’ve also made a smart decision to do research before jumping in with full steam ahead. Running a business is hard work. It takes proper planning, a clear vision, persistence and determination.

If you think you have what it takes to run a business, small or large, you’re going to need some help. Here are some places you can go to get help starting your own business:

1. Local Business Centers

Your state, province or country may make very valuable help available to you locally. There are many towns and cities that offer local business centers with everything from business plan creation to financing to expert coaching to in-depth business courses. To find these local centers you can start with Google and see what you can find. Visit your government websites to see what help they offer to small businesses. Check your local library or ask local business owners to see what resources your government has made available to you.

2. The Bank

If you need financing then the bank is an option. It may not be your only option but it’s certainly worth checking out. If you are looking for a loan to start your business then the bank will likely need a very detailed, researched and thought out business plan. It’s a good idea to have this plan available whether you will apply for a business loan or not. By doing research and planning out your objectives you’ll have a much greater chance of business success.

3. Family and/or Friends

You may have some family and friends you can go to for business support. Family who have business experience can be an invaluable source of expertise and knowledge to help you get started right. My caution here is to be careful you don’t share your big goals and dreams with those who will not support them. Some people, especially family and friends, will tell you not to start a business because they are afraid you will fail – this is not the kind of support you need when starting a new business!

4. Mentors

A mentor is someone who has done what you want to do. Your mentor doesn’t have to be a millionaire or a huge corporation owner. In fact, if you don’t want to own a huge corporation then it would be unwise for you to choose the CEO of a big company as your mentor. Choose mentors who have the lifestyle and the business you desire. Be very choosy with your mentors. Wait for them to come into your life.

5. Chambers and Networking Groups

Local chamber of commerce and other networking groups can be very valuable to both new and established businesses alike. They can help you get the word out about your business. The point of a lot of these groups is to pass on referrals and spread word of mouth marketing about local businesses. This is just what you need to build a long-term sustainable business.

6. Online Research

There is a lot of information available online about starting and running your own business. Be sure you do your research and take everything you read with some skepticism. The internet is like one massive library but there is no internet editor to make sure it’s true. You want to be careful not to go into information overload when researching. Before doing your research have a clear idea of what you want to accomplish in your business. This will allow you to choose sources that help you achieve your goal instead of distracting you from it!

There you have a few sources of help to start a new business.