There are many advantages for a small business owner to have a credit card for their business. It means that you do not have to dip into your cash fund for all your expenses. Particularly small expenses can be covered by your credit card.
Cash flow can make or break a business. Your credit card will aid you when customers are late in paying, when you have to pay the cost of a job before you can start, when you need to bring a product to the market immediately or just to stock up on cool drinks for your staff. Even travel expenses can be charged to your card.
As with other credit cards, the business credit also carries an annual fee. It does, however, come with a 0% interest on purchases for three months, which is good news for your cash flow.
An APR of around 21% applies, so it makes sense to manage your expenses and have a plan in place as to how monthly payments will be made.
One of the benefits of a business credit card is that you have the option to carry over your balance to the next month. You also get up to 56 days of interest free credit from the day of your purchase if your balance is paid in full and on time every month – more good news for your cash flow.
The credit card company partners with various retailers to bring you discounts on essential services and supplies, such as stationery that you will need daily. You also get insurance benefits such as travel accident cover, cardholder misuse protection and purchase protection. The card not only aids your cash flow but also your bottom line.
At the end of the month, you can choose between paying in full and paying only the minimum outstanding amount. If you choose the latter, it will take longer to pay off the debt and there is also the question of the interest that you will be charged.
If more than one person in the business is going to use the card for expenses, you can set limits for each person, thereby controlling your spending.
These actions can be performed online and you can view transactions, statements and the like, giving you an overview of how the money is spent. If you use your card for business and personal expenses, the card will separate the two for you.
Not everyone will be considered for a business credit card. You will be asked if you have been bankrupt before or had any past or present judgments against you. If you have been refused credit in the past, that will also be noted. People can rehabilitate, so the above only applies to the past five years. You will be asked what your expected gross income for the coming year will be and that will determine whether you qualify for the card or not. Your credit standing is vital. Hopefully, you are not in arrears with any current payments.
A host of credit cards for the small business owner is on offer. You will also receive a number of offers in the post but considering a Barclays credit card will be a solid choice.
