Business Credit Cards or Personal Cards, Which is Better?

As more people try to start up their own small businesses to survive the economic slump, credit card companies try to improve the features and functions of credit cards for business to attract more cardholders. In the past years, business credit cards were only offered for larger corporations but today even small enterprisers and home based business owners have the opportunity to use them.

Some people may think that they don't need to apply for a small business credit card since they already have their personal credit cards anyway. However, if you are running a business, there are advantages to using small business credit cards. Keep in mind that certain features are not available to personal credit cards. In this article, let's take a closer look at what the benefits are.

Advantages of Using Credit Cards for Small Business
First of all, opening a business credit card account enables the business owner to separate business from personal finances. This is a crucial aspect especially as your company starts to grow. If you're going to use only one credit card all your expenses, it will be difficult to determine which among your purchases were made for business and which ones were made for personal purposes.

Take note that as a small business owner, you are entitled to certain tax privileges. When preparing to file your business taxes, you can simply check your monthly billing statements and yearly account summaries to determine which of your purchases are eligible for tax deductions.

Using a business credit card with your business name and logo can also enhance your company's image. As you use your credit card to cover for your business expenses, you are also building your company's credit history. After a year or two of consistent business credit card use and timely payment, a business owner has built good corporate credit which will surely improve future loan prospects.

By the time you need to apply for a business loan to expand your company or launch new projects, a solid corporate credit history can win you quick approval from banks or commercial lending companies. Aside from easy approval of your loan application, you can also count on lower interest rates and better repayment terms on account of your impressive business credit rating.

Business owners who use business credit cards with reward programs can also enjoy incentives and exclusive privileges. Business credit cards with Cash Back and Frequent Flier Miles Rewards are two of the most popular rewards. Search the market for different credit card reward offers and choose the one that is best suited to your type of business.

Another great advantage of using small business credit cards is convenient account management. By using your credit card to purchase stocks or pay bills related to your business, you can easily keep track of your spending. In fact, most business credit card issuers offer an online account access so you can download your credit card reports to your computer and use it along with your accounting software.