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5 Big Benefits of Small Business Credit Cards

Owning a small business involves plenty of financial transactions. Many of those may require more cash than you have on hand. For this and other reasons, it may be a good idea to apply for a business credit card.

Here are six benefits of using a small business credit card.

1. Simplify Cash Flow and Finances

Regardless of the size of the business, having access to ample cash flow is an important priority for all small businesses. Having a small business credit card opens up available credit for your business, increasing your cash flow. You can use the credit card to buy equipment, inventory, and supplies as you need them, and pay for them on the next billing cycle.

In addition, business credit cards can be much easier to obtain than a loan or line of credit. They often have higher limits than personal cards, which can facilitate large business-related purchases that you may not be able to make with a personal credit card. Many business credit cards have a cash back program, which can have a meaningful impact on cash flow. 

Many cards also offer zero-interest financing so you can pay for your purchases over time without incurring interest. The American Blue Business® Plus Credit Card offers 0% APR for the first 12 months on purchases from the date the account is opened (then 13.24% to 21.24% variable APR).

Having a business credit card also makes it easier to organize your expenses. It allows for effortless bookkeeping, which in turn helps you track your business expenses each month.

Most business cards offer quarterly and year-end summaries, as well as the ability to upload purchase records to accounting programs like Excel and Quickbooks. This allows you to easily track expenses and simplify finances during tax season.

Amex Business Cards allow you to view a year-end summary and send transactions to Quickbooks daily, after registration. Capital One Business Cards provide a simple view of recurring transactions, a year-end summary, and the ability to download purchase records to Quicken, QuickBooks, and Excel. Chase Business Cards offers quarterly reporting and integration with accounting software to simplify accounting.

2. Control Employee Expenses

If your business has employees who travel, buy inventory or supplies, or have other responsibilities that require them to spend company money, it is very beneficial to provide them with a business credit card. This makes it easy to track employee expenses, as you can quickly see how much they’re spending and what they’re buying.

These cards give you more control over employee spending compared to using a personal card, as you can set spending limits or freeze cards as needed.

Most business credit card issuers can issue additional cards for employees at low or no additional cost. For instance, the Amex Velocity Business Card has an annual fee of $249, but this fee drops down to $99 for employee cards (for up to 99 cards).

Reimbursing employees for business expenses on personal cards can be cumbersome. A business credit card makes it easier to manage the process. Employees can use the card for all business expenses, and you’ll receive an invoice with all your expenses and all employee expenses each month.

3. Earn Rewards and Get Exclusive Perks

Many business cards offer rewards programs that can earn you cash, points, or miles. All purchases made on your business card account earn rewards, including all purchases made by employees. You can claim rewards for many different things, such as gift cards, statement credits, travel, and merchandise.  

Because some rewards programs focus on spending in certain spending categories, such as travel, businesses should use a card that matches their spending habits.

The American Express Business Platinum Card® offers rewards for high spenders on travel. Indeed, you earn 5x Membership Rewards® points on prepaid flights and hotels on, plus a 35% bonus on airlines.

There are also cards with simpler rewards programs. For instance, Capital One Spark Classic for Business offers 1% cash back on every purchase.

Just like personal credit cards, business cards offer many protections for travel and purchases. This may include no foreign transaction fees, cell phone protection, security purchase and extended warranty protection, travel and emergency assistance services, and car rental collision damage waiver. 

Business credit cards can also offer benefits that are business-related, such as discounts on business travel, shipping, and business supplies.

4. Boost Your Business Credit Score

New businesses have a completely clean slate when it comes to credit. But that’s not really a good thing. Why so? Without a credit history to review, lending institutions don’t know if you will be able to repay a loan or not, so it can be more difficult to get financing.

By using a business card regularly and being on time with your payments, your business begins to build a strong credit rating that grows over time. If you want to qualify for long-term loans in the future, there’s no better way to start.

Establishing a good payment history can help improve your business’ credit rating. Just as improving your personal credit score can allow you to borrow more money at a lower interest rate and even have a positive effect on insurance rates and your ability to rent a property, the same goes for your business credit card. 

Even if a business is set up as an LLC or corporation, business owners are often required to personally guarantee business loans. Once the business itself establishes a good credit history, personal guarantees may no longer be required.

5. Separate Business from Personal Expenses

Using a personal credit card for your business can complicate things when preparing taxes, adding to the cost of an accountant having to sort through personal and business expense records. 

To maintain good accounting, your personal expenses should be completely separated from business expenses. Having a business credit card helps you keep your books tidy and can protect your personal assets by keeping them separate from those of the business.

Not only can this save you time on a monthly basis, but having two separate statements can also make it easier to keep records and complete your annual tax return.

Some business credit cards even offer online tools that can help you track your expenses – much easier than saving a year of bills and receipts to a physical file. They often have special export features that make it easy to transfer relevant information to QuickBooks or other account software.

On top of that, having access to your company’s expense records at any time can also help speed up financial transactions and could even allow you to take advantage of opportunities, such as buying a property more quickly.

Featured Image: Megapixl

About the author: Stéphanie Bédard-Châteauneuf has over four years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on consumer stocks, cannabis stocks, tech stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.

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