Business Credit Cards

What are the Benefits of Credit Cards for Small Business?

With increasing demand from businesses, credit cards have become the "it" product for small business financing. The use of credit cards topped the list of financing sources for small businesses, according to a 2008 survey by the National Small Business Association. Check out some benefits of credit cards for small business below.

• Accessing a Cash Source: Cards provide an immediate, convenient source of cash. They can be used to pay vendors, order supplies and cover travel expenses.

• Developing Business Credibility: Help establish a successful record and credit history until more capital is readily available.

  After you've taken the leap to open a small business, you need to maintain your business credibility by being financially responsible. Credit cards can help you do that by allowing you to pay periodic expenses on time without tarnishing your relationships with vendors.

• Earning Rewards for Your Bottom Line: The perks of most cards can impact your business in a positive way. Today’s credit cards allow you to gain rewards (including cash back, airline miles, and discounts), which can help your business grow.

• Building a Solid Credit History: Help establish a respectable credit history. One option for businesses is a card with a high spending limit that will allow you to carry a balance. With a balance, payments are more manageable when cash flow is not certain.

• Record Keeping: Allows for better tracking of purchases. Credit card statements also allow you to monitor your records, employee spending, and any changes to the terms of your agreement.

• Managing Tax Matters: Credit card statements help you sort your expenses come tax time, and they may also come in handy when a tax bill needs to be paid and your cash flow is dry. While it’s not advisable that you do so often, the Internal Revenue Service has begun accepting credit cards for tax payments.

• Enjoying Increased Security: Many credit card companies protect the user against poor merchandise and undelivered service, giving the small business owner peace of mind about inventory purchases and new vendors.