Why Business Credit Cards Are a Smart Tool For Entrepreneurs
Whether you’re starting up a new business or have branded your name locally or online, business credit cards can be extremely helpful. Unfortunately there are many business owners out there who are skeptical about the benefits and feel that it’s only going to get them into trouble. Today, we want to give you an inside look on how business credit cards can help your business grow and make life a lot easier.
Business Credit Cards vs. Consumer Credit Cards
There aren’t a lot of differences between business credit cards and ones you probably have in your pocket right now. They are used the same, have similar interest rates, and will provide you with means when the cash flow isn’t there. However, one of the biggest differences is your credit line. If your business is good about paying bills on time, profits are steady, and you have enough to back your credit; the limit is usually higher than a consumer card.
This approach allows your inventory to stay stocked, your bills to be paid on time, and even extra money to add into your marketing campaign. We’ll discuss this more later, but the point is that you have a good way to expand your business in a short period of time.
Tracking and Spending
One of the biggest problems surrounding a business is being able to keep track of all the expenses and extra spending. Without any type of system you could fall on hard times in a hurry, but business credit cards give you a way to keep everything “in check.” This keeps you from using money from your personal account, a consumer credit card, and even cash.
It’s also important to understand that spreading your spending ways makes it harder to keep track of it all. Some of the more successful small and large businesses will utilize these credit cards to put all company expenses in one place. If your company is built to “woo” clients it’s better to add this in with your typical expenses as opposed to using a separate card or cash.
Since organization is the name of the game when it comes to any business; it’s nice to know that most business credit cards have quarterly and annual reports. These are very helpful whenever you need to make budget cuts, see what type of employee spending is being used, and what type of projected earnings you could see in the future.
Take advantage of these because they can have a major impact on your business. They give you the opportunity to haggle with some of your distributors to cut down on your overall costs. If they don’t agree to a reduction in price you can always start looking for another company to take over for them. Eventually you realize that business credit cards offer a cost effective approach to the operations of your company.
Look for Rewards Programs
Whenever you’re considering a business credit card it’s important to ask about the reward programs available. Some of the card company’s offers will be better than others so it’s a good idea to compare each one. The goal is to figure out what benefits your company the most, especially if there are cash back options. The money you receive back could go towards more inventory, marketing and advertising, or anywhere else you see fit. Whenever you’re considering a business credit card it’s important to ask about the reward programs available. Some of the card company’s offers will be better than others so it’s a good idea to compare each one. The goal is to figure out what benefits your company the most, especially if there are cash back
Keep in mind; credit card companies are always coming out with ways to attract customers. Sometimes your setup is different from the newer approach they offer, but you can transfer everything over to the other system. Sometimes these benefits will be in addition to what you’re already enjoying. The best thing to do is keep up with what’s available and take the time to understand how each one of them works.
We understand your main concern is that a new business credit card is only going to create abuse in the company. It’s a valid point, but it doesn’t have to be this way. Remember that your company is all about the proper organization, which means you can overcome credit card abuse as well. You definitely have to have the right amount of discipline if this is going to work. The best way to do that is designating your card to certain purchases.
Even though the card might be used for client expenses to keep track of everything, we recommend staying away from it. Then again; you could always give each employee a certain spending limit each month. There are several ways to handle this where it can still benefit you and not become an abusive situation.
Another area to consider is how you adapt to using a business credit card. This is not an exciting moment where your company should go on an expensive shopping spree. The idea is to keep your business running smoothly, even if there are hiccups along the way. When you take this approach you’re able to do things more effectively and provide your company with the opportunity to be more successful.
If you think about each one of the tips we’ve given you today, a business credit card can be a huge help. It’s possible that they will allow you to restructure your business in a way that is more productive and can distribute more products throughout the year. The end result will be a more successful company with bigger profits. We don’t know any business owner out there who would object to these types of benefits.
Do you have a business credit card?