Small Business Credit Cards

What Are Business Credit Cards?

A business credit card is really quite self-explanatory, it is a credit card similar to a personal credit card that you use for business or work related purchases only, and to keep these separate from your personal credit card and expenses. Many business owners choose between a business credit card or a separate frequent flyer card to keep business expenses separate.

A business credit card opened in the name of the business, and multiple cards can be issued under the one business name. That means you must have a business with an ABN that is in good credit to apply for a business credit card. Understand the fees and charges that apply to changes you may want to make to the account by reading the terms and conditions before applying for any business credit card.

Statements will often be itemised specifically for GST and other tax purposes – but this can vary so check the terms and conditions of any card you are interested in. Another key thing to remember is that restrictions may apply on a business card, such as no ATM withdrawals or only certain purchases allowed.

How To Choose the best Business Credit Card?

A business credit card can also be a charge card, meaning there is no pre-defined spending limit, but transactions are approved based on the income and assets held by the business on an individual basis. Whether you want a pre-defined credit limit per card user or on the account as a whole is one of the first important decision you need to make before applying. You’ll also need to think about how many additional cards you want to have, fees and charges applicable and restrictions you want on the cards.

Whether or not the business deals in foreign imports etc, or whether and how membership rewards could be used will be important considerations when choosing rewards programs too. Think about the business and its needs as opposed to any personal credit card spending you do. They are completely separate.

How to Avoid the Biggest Mistakes?

When dealing with business credit cards it’s important to keep track of who is using a card and for what and monitor card use regularly via some internal system. At the same time only employees you trust and can keep in contact with should have access to a business credit card. Business credit cards are a great solution for business expenses but come with additional responsibility for whoever uses them and gives them out.

You’ll want to choose a card that you know is widely accepted, but consider whether one with an issuer such as American Express would provide better benefits per dollar spent and what you want to use the card for. Because business credit cards can be used to rack up rewards points, it’s important to think about your business spend and do a proper comparison before settling on one. While it is always a good idea to understand what your current bank offers, it won’t be providing the whole picture of the business credit card market, so it makes sense to view other offers.

If your business turns over more than $2 million annually, or has a number of employees, a corporate credit card could be more suitable so business owners in that position should check all of their options with the bank and in the market as well.