Reasons to Consider a Business Credit Card

Living in a society which has been majorly digitized, most people carry credit cards and debit cards in their wallets and purses rather than cash.

The biggest advantage of these cards is that you can access your money wherever you are and whenever you want. Credit cards, apart from serving as an expense tool for your personal needs is also preferred for business expenses. Any kind of expenses or purchases required at any given time can be done with a business card.

Major banks in India have been introducing a wide range of credit cards solely for your business needs. These cards have been serving as a support for many successful businesses all over the country. You need not carry wads of cash in your wallet and worry about security anymore. This card will be safe as well as secure in any kind of transaction you make for any aspect of your business.

Here are the reasons why you should consider a business credit card

Financial Protection

Business cards can be used as a backup plan to protect the business in the event of a slow year or reduced profits. In the case of a bad month when the company does not make the money it usually does, the expenses of the company still need to be met which includes salaries, monthly rent of office space, equipment, etc.

All this can prove to be a heavy financial load to the owner or the board if there is no financial backup. Your business card proves to be exactly that. You can use your card to access the funds which are given to you as credit to run the business for those months effectively.

Ease of Access

Another reason why these cards have been preferred over other financial sources is the ease of access. It is highly convenient, and you can access the money from anywhere and at any time.

If you need to make an emergency purchase for the company at an odd hour or on an urgent basis, you need not find an ATM or carry your checkbook with you everywhere you go. You can make any number of purchases at any time and pay with your card.

Easier Qualification for Loans

Any business person who has tried to apply for a loan from a bank without collateral can tell you how strenuous it can be especially when you do not have a well-established credit reputation. Credit cards can be a better alternative for business owners compared to traditional financiers, they do not require you to provide collateral before they give you credit. You can easily qualify for funds even if you do not have a strong credit history. This is one of the best reasons why you need to get this small business card for your business.

A Way to Improve Credit History

You can improve your credit history as well as build good credit with your business credit card. These cards are not like regular cards with the applicable interest rate.

Business credit cards require a credit score which is above 850 and a credit history which shows you are a responsible borrower. If you have applied for loans or have purchased products with your business card, the bank will check your repayment history of the loan as well as your timely payment of bills to establish your creditworthiness. This will get you a good credit history which in turn will affect the future transactions and loan requests you make with your credit card issuer by getting better rates of interest and access to more funds.

It Helps Separate Personal and Business Expenses

Your personal expenses should not be mixed with your business expenses. Many people indulge in using their personal credit card to make business transactions which is a big mistake as they think they will be able to pay it back later.

It is essential that you do not do so and separate your expenses and categorise them under business and personal by having two cards. Using your personal card for business can have a negative effect on your credit history and report as well as for your accounting and tax calculations.

Your business expenses must be kept separate and should have a different book of accounts with each transaction recorded. This will help you and your business during audits.

Insurance and Protection

Insurance and protection of your purchases is an important aspect while running a business. Your personal credit card does not get you this feature. However, your business card on the other hand, which is insured offers you with purchase protection free of cost.

If any of the products you buy gets misplaced or stolen, if you report it within the stipulated time, you will be able to claim the insurance on those products. Even though the insurance cover is not very high, it still helps in protecting your business from any kind of fraud.

Accepted Currency

There are many vendors, retailers, and businesses which do not accept any other form of payments apart from plastic money. As mentioned before, debit cards and personal credit cards can prove to be harmful while running a business, hence it is important to maintain a healthy line of credit with a business credit card.

Having this card also makes you and your business a prospective customer for future transactions from the vendor and buys you goodwill as well. This can prove to be beneficial in the future.

Saving on Travel

Your business credit card from whichever bank you choose to get it from will come with a wide range of offers on flight tickets and other travel discounts since it’s an integral part of any business. You can use this card for your flight bookings and earn airline miles which can help you in the future. These miles can be exchanged to buy flight tickets saving you the expense in the future.

Enjoy Bonuses and Discounts

A very important aspect of any credit card is the bonuses, cashback offers and the discounts you get with your purchases. The same is the case with your business card. It is advised that you research extensively from the business cards banks have to offer as almost all banks offer this card.

The card which has the most benefits on various aspects of your business along with a nominal annual and joining fee would be the best choice. Offers and discounts are good for business, but you should also keep in mind to get a card which saves you money on a long-term basis.

These are the reasons why you should consider getting a business credit card. To know more, you can visit the page mentioned above to get a detailed analysis of the cards offered by the top banks in India.

Written by Top TradeFairs