When it comes to starting and succeeding at small business, you need capital. Bottom line. Whether you’re offering a service or a product, you will never get anywhere without money. That’s why a small business loan or a grant is often the first course of action for new business owners.
However, there is another way to get the money you need to buy equipment or inventory or to get out of debt – open one of many small business credit cards. Corporate credit cards have the distinct advantage of allowing you to keep your personal and business expenses separate, which is a huge advantage. When you’re able to split your business and personal expenses, you’ll save yourself loads of time and headache.
Personal Vs. Business Credit Cards
It’s reported that nearly 50% of small business owners use their personal credit card for all of their everyday expenses. Whether they’re buying groceries for the family or they’re buying a new machine for the factory, it’s all on the same statement each month.
This works for a while, but then tax time comes around. If you get audited, you’re going to have to separate every purchase you’ve made to explain what it was for. Think of all the time you’ll save if you separate your expenses. When you have a small business credit card that you use strictly for your company, you will have easy to read statements that will allow you, the tax man and even your accountant to know what’s going on with your business’s balance at all times.
Qualifications For Small Business Credit Cards
During the recession, banks nearly halted the issuance of small business credit cards to small business owners. As the economy slowly recovers, banks and the government now see small business cards as a great way to stimulate the economy. That means that it’s now easier than ever before to access the line of credit you need.
Some people are under the assumption that your personal credit history has to be perfect in order to secure a small business card, but that’s just not true. In fact, your company credit cards won’t even show up on your credit report unless you manage to fall into default. Other than that, your business related expenses and your personal account will be kept separate.
You will of course have to register your business name and you’ll have to provide your Federal ID number and Tax Exempt number, which you obtain from your county clerk’s office. You can then apply online with one of the many small business credit card vendors. Let’s look at a few of them here.
Bank of America
Bank of America is one of the best sources for popular credit cards. Bank of America is a very reputable bank and so you can bet that reputation spreads over into its small business credit accounts, as well. But you will often find great promotional offers with BOA cards. For instance, you’ll often find that you have so many days advance notice on any rate changes on future balances, no fees for going over your credit limit and a minimum of 25 days from the date of your statement until the time the payment is due.
But we haven’t even begun to get into interest rates. When you click on the business credit cards link, you will be taken to a page with a few different offers. You’ll find Platinum Visa and MasterCard with 0% introductory APRs on all purchases for six months, no annual fee and much more. There are even cash back and rewards cards that will allow you to earn points every time you make purchases that can be used for things like travel tickets, hotels, merchandise, rental car services and fancy restaurants.
Plus, if you bank with BOA, you’ll be able to keep all your statements in one place, which is always nice.
Visa Business
Of course, if you want a small business credit card, you could go right to the source. Visa Business offers the Visa Business Card that gives you everything you expect from Visa. You get purchase security and extended protection, zero liability for business, emergency card replacement and Visa SavingsEdge, which will put more money in your pocket each month the more you use the card.
With Visa accepted pretty much wherever you go, and the fact that Visa is the credit card of choice for many millions of people worldwide, Visa Business financial services isn’t a bad choice at all.
MasterCard
MasterCard is also accepted pretty much everywhere and offers many promotional deals like no annual fees, rewards, low APRs and many more. You can even get your logo imprinted on your cards to make it official.
Another plus about MasterCard is that it is very easy to apply online. The online interface is easy to navigate and attractive and you can tell the company has put a lot of work into making it more enticing for customers. The process for applying for a business card at MC is also very simple and you can get instant approval in most cases.
All in all, these are all great choices for applying for a credit card. If you bank with Bank of America, you may want to choose that card just to keep everything in order. But your best bet is to research all three choices, and any others you can find, in order to find the card that offers the best possible value for the line of credit you open.