Choose the Best Business Credit Card for Your Small Business

Getting the best business credit card for your small business can make the difference between long-term business success, and bankruptcy. Each year, thousands of small and home-based businesses start up in every state. And while every small business owner starts out with big plans for a successful business, many of these startups will go out of business within the first two years.

One reason for the high failure rate of new small businesses is inadequate future planning. The fact is, every business goes through economic cycles; some quarters things are good, and other quarters you’re struggling just to stay afloat. This is true of all businesses, but smart owners and business managers prepare for these “down times.” One way to prepare your small business for the lean months is to use a dedicated business credit card to help you establish excellent business credit.

Unlike consumer credit cards, business credit cards are essential tools for surviving in the business world. While consumer cards are often “shortcuts” to allow consumers to “buy now, pay later,” business credit cards serve a much more useful purpose.

Business cards allow a business to consolidate their monthly expenses, and view detailed reports of where their money is being spent. Many of the best business credit cards also offer discounts on common business related expenses, such as printing, office supplies, travel and entertaining clients.

For small businesses, a business card is absolutely essential for one other reason: it is critical that you have a separate card to use only for business expenses. This will make your bookkeeping and tax preparation much simpler, and avoid running into problems on your tax return by using personal credit cards or bank accounts to finance business expenses.

So how do you choose the right credit card for your business? There are lots of choices out there, but there are really only a few variables to consider. Obviously, your first consideration is the APR, or annual percentage rate, of the card. Unless you will be paying off your balance in full every month, you will want to find a card with the lowest possible interest.

You also want to consider any fees that may be associated with the card. Some cards have annual fees, for example. Of course, these expenses are tax deductible; but if you can avoid paying them to begin with, so much the better.

Your next consideration should be ease-of-use. A good business credit card should allow you to access your account online, and you should be able to view updated expense reports to see exactly where your money is going. If you have employees, check that the card allows you to issue separate cards to each employee, without additional fees. It is also preferable to have the ability to set spending limits for each employee card individually.

If you travel a great deal with your business, it may be beneficial to seek a business credit card with airline miles and other travel rewards. Otherwise, look for card that offers cash-back rewards.

A business credit card is essential to grow your small or home based business. Use the criteria above to seek out the best business credit card for your new company.

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