Business Credit Cards for New Business

Often times, entrepreneurs decide to hold off applying to business credit cards. Instead, they utilize their personal credit card for the business purchases. While this may seem like the simplest approach, business credit cards offer some useful advantages for new businesses – even when the new business is small.

Here are just six of the many advantages that small business owners see when they utilize a business credit card for their new company, giving you plenty to consider when determining whether or not to apply for credit card for your startup.

1. Establish business credit

When it comes time to apply for a business loan, banks will examine your company’s credit history, just as they do with your personal credit history when you apply for an auto loan. Opening a credit card will allow you to show to future lenders that your business is responsible when it comes to paying back debts.

Ink Cash℠ Business Card Up to $250 cash back bonus - $100 cash back bonus after your first purchase, plus an additional $150 after you spend $5,000 within 3 months! 5% cash back on the first $25,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services 2% cash back on the first $25,000 spent annually at gas stations and restaurants 1% cash back on all other card purchases with no limit to the amount you can earn Cash back rewards do not expire 0% Introductory APR for 12 months No Annual Fee Intro APR for Purchases Intro APR for Balance Transfer APR as low as Annual Fee 0% for 12 months 0% for 12 months 10.24% (Variable) $0

2. Ease cash flow concerns

Cash flow can raise concerns during the beginning months of a business. You’re still securing regular customers so there are peaks and valleys when it comes to revenue. Unfortunately, purchases still need to be made. Many business owners utilize their personal credit cards to make these necessary purchases. But this practice can have several drawbacks.

First, personal credit cards often have a much lower spending limit. Some equipment may cost more than the entire limit of your personal card. Business credit cards typically have much higher limits (some have limits of $50,000+), making it much easier to purchase expensive supplies.

Second, if your personal card does have the available credit, are you going to want to tie it up with business expenses? If timed wrong, it could cause problems if you need that credit to stay at a hotel or cover expenses for upcoming holidays and events.

3. Easier bookkeeping

Bookkeeping can get tricky when you are utilizing your credit card for both personal and business expenses. It will require you go through your monthly statement item by item and designate if purchases were for business or pleasure. And, yes, you will want to document this as it will make an audit from the IRS much less painful.

4. Control employee spending

If you currently have employees or anticipate having employees in the future, a business credit card account will help control their spending. This is because you will be able to set individual limits for each card tied to the account, which will limit how much each employee is able to spend each month. Some cards will even allow you to control what types of merchants the employees are able to purchase items from with their card.

AT&T Universal Business Rewards Card Designed for businesses with an established credit history 0% Intro APR on Purchases for 6 months. After that, 14.24% variable* Earn 5 ThankYou Points® For Every Dollar You Spend On Eligible AT&T Products and Services Earn 3 ThankYou Points® For Every Dollar Spent On Purchases at Certain Office Supply Merchants, Gas Stations, and On Professional Services and 1 ThankYou Point® For Every Dollar Spent On Other Purchases Additional Cards For Employees With Credit Limits You Set No Annual Fee* Intro APR for Purchases Intro APR for Balance Transfer APR as low as Annual Fee 0% for 6 months - 14.24% (Variable) $0

5. Access to discounts

One fringe benefit of utilizing a business credit card is gaining access to useful discounts. Discounts often include ones for business supplies, printing, shipping and even travel related services like car rentals. While these discounts may not seem like that big of deal, they can really add up and make a large difference when your company is trying to get established.

SimplyCash® Business Card from American Express OPEN Get 5% cash back on wireless services and office supply purchases* Get 3% cash back on automobile gasoline* Get 1% cash back on other purchases* No limit to the amount of cash back you can earn Cash back on purchases is automatically credited to your statement each month Save 3% to 10% automatically on business expenses from FedEx, Hertz®, OfficeMax®, and more with OPEN Savings®* No annual membership fee Intro APR for Purchases Intro APR for Balance Transfer APR as low as Annual Fee 0% for 6 months, 9 months or 12 months, based on your creditworthiness - 12.24% - 19.24% (Variable) $0

6. Other perks

Many business credit cards with rewards will also provide your business with the opportunity to earn cash back and other rewards. These rewards are especially useful if you will need to travel for business, as they often can be redeemed for car rentals, airfare and hotels. Your card may also provide you complimentary access to airport lounges where you can relax and gain Internet connection while waiting for your connecting flights.

You may be wondering how these perks are any different than the ones you get with your personal card. The great part of many business credit card reward programs is that you often will accrue points faster on business related purchases, like the money you spend on advertising.

Follow @CreditDonkey or write to Meghan Clark at meghan@creditdonkey.com

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Disclaimer: This content is not provided or commissioned by Chase. Opinions expressed here are author's alone, not those of Chase, and have not been reviewed, approved or otherwise endorsed by Chase. This site may be compensated through Chase Affiliate Program.

Disclaimer: This content is not provided or commissioned by Citi. Opinions expressed here are author's alone, not those of Citi, and have not been reviewed, approved or otherwise endorsed by Citi. This site may be compensated through Citi Affiliate Program.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.