{"id":592,"date":"2023-04-18T14:39:10","date_gmt":"2023-04-18T14:39:10","guid":{"rendered":"https:\/\/www.smallbizgenius.net\/?p=592"},"modified":"2023-06-19T12:05:39","modified_gmt":"2023-06-19T12:05:39","slug":"should-i-get-a-business-credit-card","status":"publish","type":"post","link":"https:\/\/www.smallbizgenius.net\/knowledge-base\/should-i-get-a-business-credit-card\/","title":{"rendered":"Should I Get a Business Credit Card? 7 Good Reasons to Go for It"},"content":{"rendered":"\n

Business credit cards offer a number of perks to business owners, regardless of the size of their operation. In addition to rewards and welcome bonuses, business credit cards also tend to have higher credit limits than personal ones.<\/p>\n\n\n\n

The obvious benefits lead many professionals to ask one simple question: should I get a business credit card? In this article, we will tell why it\u2019s a good idea to apply for a business credit card and walk you through the eligibility requirements.<\/p>\n\n\n\n

You May Be Eligible and Not Know It<\/h2>\n\n\n\n

You may have convinced yourself you can\u2019t possibly obtain a business credit card because you don\u2019t own a large company or even a small business in the traditional sense. But do you need a business to get a business credit card? <\/p>\n\n\n\n

When you hear the term business owner, you probably think of someone running a company with a number of employees. However, you don\u2019t need to be incorporated or have a formal business structure to qualify for a business credit card. You are eligible even if you are self-employed and working as a freelancer from home.<\/p>\n\n\n\n

That said, the options offered to a contingent worker, for example, are bound to be limited. As such, you need to do your homework on what cards are available to you. On the other hand, if you own a company and need a business credit card, you can explore the list of the top business credit cards on the market.<\/a> <\/p>\n\n\n\n

It Can Help You Boost Your Credit Score<\/h2>\n\n\n\n

So why get a business credit card in the first place? Getting a business credit card is a great way to raise your personal credit score. A business credit card enables you to reduce spending on your personal one and use less of your available credit. This and covering any work-related expenses with a separate card will boost your credit score.<\/p>\n\n\n\n

However, keep in mind that when you apply for a business credit card, you may initially lose anywhere between two to five points on your credit score. That\u2019s because financial institutions usually evaluate your creditworthiness by pulling your personal credit report when you\u2019re applying for a card. <\/p>\n\n\n\n

This is done to determine whether you\u2019re eligible for a new credit card, and it\u2019s the only part of the process that negatively affects your credit score. After the credit inquiry, your personal and business lines of credit are kept separate, and your score won\u2019t be affected by your credit utilization ratio. <\/p>\n\n\n\n

This doesn\u2019t mean that you can afford to be irresponsible about your spending with your business credit card. If the card is tied to your Social Security number and your business defaults, you\u2019ll still be held personally responsible for the money spent.<\/p>\n\n\n\n

It Allows You to Separate Your Business Expenses From Your Personal Ones<\/h2>\n\n\n\n

Using a business credit card for personal purposes is usually considered bad practice. It can be quite a hassle when the time comes to file your taxes and sort through your credit card statements.<\/p>\n\n\n\n

Choosing a business credit card over a personal one for your business allows you to have a clear insight into your business expenditure. Furthermore, you will save on accounting expenses, as there will be less work for the accountant since they will have fewer expenses to go through. <\/p>\n\n\n\n

That\u2019s not all. Many business credit card issuers allow you to export your expenditure details to accounting software such as Quickbooks. This can exponentially speed up the accounting process.<\/p>\n\n\n\n

It Enables You to Improve Your Cash Flow<\/h2>\n\n\n\n

One of the main reasons to have a credit card is to gain access to a line of credit. It\u2019s also easier to qualify for than a bank loan. Since even a new business can get a business credit card, this is an ideal option for startups to secure the necessary cash flow to expand their operations.<\/p>\n\n\n\n

Having a business credit card enables you to pay your contractors and suppliers upfront while simplifying the transaction process. Some vendors offer discounts for those who have a good track record when it comes to making payments early or on time.  <\/p>\n\n\n\n

To avoid high-interest payments or other more extreme unpleasantries like having to file for bankruptcy, make sure to cover your entire balance on time. <\/p>\n\n\n\n

It Offers Many Convenient Rewards<\/h2>\n\n\n\n

Regardless of whether you get a business credit card or a personal credit card, you\u2019ll likely be treated to a few generous rewards. There are typically three kinds of rewards:<\/p>\n\n\n\n