Your credit utilization makes up about 30% of your credit score, and it’s a good rule of thumb to only use about 30% of the credit available to you. Check out the annual interest rate (APR) to see if a card is competitive, look for introductory or annual fees, and watch out for any other high charges in the small print. You can choose to either pay off the balance in full each month, make the minimum payment, or something in between. In turn, if your business has a strong credit history, it can open the door to cheaper or easier borrowing so your small business can finance its growth further down the line.
- Business credit cards also tend to offer larger sign-up bonuses than individual credit cards, in anticipation of high business spending.
- Just as people do, businesses develop a credit history and, in turn, a credit score.
- FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment.
- In such instances, a business owner may end up with personal liability for business credit card debt.
Special Perks
Separating business spending from personal spending can save owners a significant amount Bookstime of bookkeeping time. Travel perks are another common benefit, since many businesses have significant travel expenses. A business credit card might entitle the holder to use an airline’s VIP lounge at airports or receive discounts on hotel stays during business trips.
Business Cards Don’t Have the Same Liability Protections as Personal Cards
Some business cards may even offer short-term financing for large purchases, which is helpful for a new business trying to get off the ground. Business credit cards are designed business credit card definition to help small business owners track their business expenses and take advantage of specific benefits. This can include the opportunity to issue employee cards for free, as well as integrate business spending with bookkeeping software for an easier time come tax season.
Compare Best Credit Builder Cards in the UK
Your business may not always have enough cash in the bank to stock up on inventory or make large purchases while keeping up with day-to-day expenses. Using a credit card can help spread out big-ticket items over time — especially if it’s a business credit card with a 0% APR intro period — or help you keep buying what you need during slow seasons. If you’re looking for a business charge card which will allow you to spend more freely and improve your cash flow, the Plum card has an extended repayment period of 60 days.
- By understanding their unique features, benefits, and potential drawbacks, you can make an informed decision about whether a business charge card is the right financial instrument for your company.
- Issuers will often look at your personal credit score to assess your creditworthiness.
- This way, a business owner can build up decent credit before applying for a more popular card with better rewards.
- They’re best for businesses with robust cash flow that want to maximize rewards.
George has also appeared as a panelist on Channel 5 News, Sunday Morning Live, and adjusting entries the Sky News Press Preview. George is the editor of four published books and is the co-author of Inside Allenwood, a non-fiction book about the rise and fall of a British banker. Resources and tools to help move your business forward from the experts at Capital One. All users of our online services are subject to our Privacy Statement and agree to be bound by the Terms of Service.
