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The Perks of Having a Business Credit Card

  • December 4, 2019
  • By Sarah Solomon

As small business owners, there are numerous reasons to have a credit card.  For instance, a credit card can help keep track of your business expenses. It can also offer opportunities to earn points or rewards after certain purchases.  Finally, it can help you secure funds to finance your business if you do not qualify for a small business loan.  

While having a credit card is great, using it correctly is very important.  Many business owners tend to put all their business expenses on their personal credit cards.  Although the cards function the same way, there are advantages to having both a personal credit card and a separate credit card for your business.  REIL will elaborate on the advantages below, and why you should obtain a credit card for your business! 

Advantages:

  1. Higher credit limits
  2. Building credit
  3. Rewards

Higher Credit Limits

Business credit cards typically have much higher credit limits than personal ones.  This is because business credit cards account for your business expenses. In other words, businesses have more expenses than one person ever would/should.  Additionally, as a business, there is more capital available. Therefore, more spending power is available.  

Having a higher limit can be essential for your business.  You can buy that new truck your company needs by treating your credit card as a method of funding.  In actuality, a business credit card is exactly like short-term financing.  

Build your credit

Having a business credit card with a high limit provides you the opportunity to build your businesses credit score.  Maintain a low utilization rate(the percentage of your available credit that you have used) and pay your bills on time. The higher the credit limit, the easier it is to keep your spending under a certain credit utilization rate. In return, your business credit score will benefit. 

Additionally, having good business credit helps you in the future.  Should you need any other forms of financing, your business credit can show your reliability.  It can aid lenders in trusting that you will return your borrowed funds. 

Rewards 

Business credit cards have great rewards that are geared towards businesses.  Typically, your business credit card will award you points in spending categories that are common amongst business owners.  For example, such as spending on advertising, office supplies, or business vehicles. On the other hand, personal credit cards typically don’t reward points for spending in these categories.  The categories of personal credit card reward points are for spending in restaurants or groceries. Therefore, it is smart for a business owner to have both a business and a personal credit card.  Don’t combine the two, you will receive fewer and irrelevant rewards. You may as well earn points in the categories where you spend the most. 

REIL Advice 

If you’re looking for a business credit card, feel free to speak with one of our representatives.  REIL has an application and requirements to be filled out prior to applying for a business credit card.  If the business credit card is not for you, seek REIL out for other funding solutions! 

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