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Zhi Finance » Do business credit cards help?

Do business credit cards help?

Yes’ – that’s the answer almost immediately. At least it does for most businesses (especially small businesses). Before we dive into how a business credit card can be helpful, let’s try to understand what a business credit card is.

Simply put, a business credit card is a credit card that is owned by a business rather than an individual. To better understand this, you can simply draw an analogy between a business credit card and a business bank account, which is also in the name of a business. Other than that, a business credit card works in much the same way as a personal credit card; with a few exceptions. These exceptions come in the form of flexible credit limits, low APRs and some other additional benefits that are only available to business credit cards.

Even from this point of view alone, a business credit card seems like a good offer. However, even without these benefits, business credit cards can be attractive because the main benefits lie elsewhere. The biggest benefit of a business credit card is realized in the area of business expense accounting. For most small businesses, accounting for business expenses is a big overhead. With a business credit card, this is easy to deal with – you just need to make sure that you charge all your business expenses to your business credit card and your personal expenses to your personal credit card, which means that all you need to do is to separate your business and personal expenses. So, your business credit card will have all of your business expenses on the bill and you won’t need to sort through all of the various bills or sort out these items from your personal credit card statement. The key here is to make sure you pay all of your business expenses (or use as many as possible) with your business credit card. In addition, many business credit card providers realize this need for small businesses and even organize their business credit card bills in a way that meets the accounting requirements of these businesses. Therefore, in most cases, they group the charges on the business credit card bill appropriately to facilitate accounting for business expenses. In fact, some business credit card providers offer bill formats that can be downloaded and exported to your accounting system, meaning that you do not need to manually enter the data in your accounting system. If the format doesn’t fit your accounting system, you can hire a software professional to write a small, quick program to convert it to the proper format.

Thus, just one reason – “to facilitate accounting for business expenses” – is enough to support the case for a small business credit card.