It is just as important for your business to establish a good credit history as it is for you in your personal life. A good credit history allows you to borrow money and to do so at a low interest rate. Without a good credit history, you are either unable to borrow money, or if you can find a lender to take the risk on you, then you will pay a very high interest rate for the privilege.
Once you have your business established you want to make sure that you never mix your personal finances and those of your business. Your business should have its own checking account, and if you need or want to use a credit card, then you should obtain one in the name of your business.
Keeping separate accounts makes your life infinitely easier come tax time. When you file your personal and business taxes the task is much simpler if your accounts are separated from each other. Should you, or your business, be audited by the IRS the separate accounts can go a long way to helping you prove the expenses your business had and all of the financial transactions you have completed over the year.
One of the biggest advantages to a business credit card is that you can use it for all of your business expenses and it will help you track all of your spending over the year. If you were to put all possible expenses on your credit card, and then simply pay that bill each month, you can easily use your monthly statements to see where your money has been spent.
If you have a business with employees you might want to give them access to a business credit card to make necessary purchases in your absence. This will allow them to purchase needed items and not have to use either cash from the business or their own money and be reimbursed by the business.
A business credit card can also come in handy if you find your business has a temporary cash-flow shortage. You can use your business’s credit card to get by until your cash-flow situation improves. This should not be a regular usage of a business credit card, but it is fine to do from time to time when necessary.
To determine which business credit card is best for your business you will want to examine how you will be using it and if you will carry a balance from month to month or pay it off each month. If you will carry a balance each month then you will want to find the card with the lowest interest rate. If you will be paying off your account each month then there are a lot of great offers out there for business credit cards which will offer you rewards for use. These rewards can vary from frequent flyer airline miles to cash back rebates. This can be a great way to save on your business travel expenses!
Most businesses today should have at least one business credit card. A business credit card will help your business to establish a good credit rating, keep your accounts separate from your personal money, gives your employees purchasing ability in your absence, and cover a short-term cash-flow issue. It is important for you to do your research and find the best card that will meet the needs of your specific business.
Whether businessmen need a credit card or not is a debate that never seems to end so the wise choose to keep mum rather than waste time flogging a dead horse. They might as well buy cvv shop so as to keep their cards in check as they already have plenty of them.