Credit Cards for Businesses

To run a successful business, you need to mix relentless optimism with a healthy dose of realistic pessimism. For every benefit, there's a potential negative. A credit card for your business is a perfect example.

A small business owner always needs to take a balanced approach to every decision. Getting a credit card for your company is no exception. It has numerous benefits that can help you in the long run, including rewards programs, establishing credit for your firm, and added convenience. Before you focus on each upside, however, you need to understand each of the downsides.

You're linked to your business plastic

For many entrepreneurs, your businesses' credit is tied to your own. Until you have a company that's established and running smoothly, you're personally liable for its debts. If you're late on a payment for your business card, for example, the late pay will be reflected on your personal credit report. You'll also be held liable for any delinquent accounts. Failure to make a payment for your business will have creditors knocking at your door.

Consumers have more protection

There are more protection laws and services for individuals than for businesses. If you dispute a late pay on a personal card, for example, your credit card company cannot list that payment as late until the issue is resolved. Consumers can also receive help from their credit companies with refunds for damaged merchandise. Businesses do not enjoy such perks.

Those are some of the minuses of business credit cards. But there are also plusses.

Build your reputation

A business credit card can help build a solid credit history for your company. Register with the major credit business bureaus-Dun & Bradstreet (D&B) and Business Credit USA. These work much like the credit card bureaus for consumers, and will help establish you as a legitimate business in the eyes of clients.

Find the right fit

Make sure that the credit card you choose aligns with your business in terms of rewards, fees, and interest rates. For example, if you travel often, choose a card that grants free airline tickets as a reward. Or, if you have multiple employees and need additional cards, make sure that these won't require additional fees.

Added convenience

Instead of carrying a checkbook, use your credit card whenever you need it. You'll improve your expense tracking; that's because most companies will provide you with an itemized list of expenditures. You can also add additional cards for key members of your organization as necessary.

Getting a credit card for your business will help it in the long run. The benefits-added convenience, a chance to build your credit history-can only help your venture. Just be aware of the differences between a consumer and a business credit card, and how tied in you are to your organization's credit. As any business owner knows, an informed decision is the best decision-especially when finances are involved.