While the possibility of wracking up debt and engaging in out-of-control spending are two big risks of credit cards, they can also be very advantageous for a business when used correctly. When you apply for a small business credit card, you can only use it to make purchases for your company. This offers you a crucial revolving line of credit for times when you run into tight cash flow issues or need to cover large expenses.

Business credit cards are similar to consumer credit cards in that the issuers of both impose a credit limit on customers and charge interest for any amount carried over from one billing cycle to the next. Both features can discourage you from getting into debt as a small business owner.

Benefits of Using a Business Credit Card

Unlike a small business loan that can require significant application fees and take several weeks or even months to process, business credit card issuers typically don’t charge a fee and don’t have a long underwriting process. That means you can start using your business credit card as soon as you receive it in the mail. You can budget your payments by paying as much as you can afford each month as long as it meets the card issuer’s minimum payment requirement.

It’s common with consumer credit cards and becoming more common with business credit card issuers to offer customers a small percentage cash back or other rewards for using the card. That means the credit card issuer could be paying you to use it each month if you pay the bill in full and don’t accrue interest. You typically receive more benefits from using a business credit card over a bank loan as well. For example, your card issuer may send you a statement categorizing your expenses during the year while you wouldn’t expect that from a bank.

At Simplicity Capital Finance, we’re prepared to assist you in researching and applying for a small business credit card or other options that meet your needs. Please contact us today to request an appointment.