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How to Apply and Manage Small Business Credit Card for Maximum Benefits

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Benefits of Small Business Credit Card

Best Effective Tips for Small Business Credit Card Management

If you own a small business, you can apply for a Small Business Credit Card. If you are a sole proprietor of the business, you can apply with either your social security number or employee identification number, EIN. Neither the expenses incurred with your business card show up on your individual credit reports nor does it affect your individual credit score. Here we will discuss on best ways to manage small business credit card for maximum benefits like earn cash back, rewards or airline miles.

Being a small business owner, a business credit card helps you separate your business expenses from personal expenses. It also makes it easier to keep track of your business expenses.

When you apply for a small business credit card, you have to provide your financial information best to your knowledge. If you have a start up, you will qualify for a small business credit card based on your personal credit.

Benefits of Small Business Credit Card

You can enjoy several benefits having your small business credit card. Some of the benefits are:

Easy Money Management: As your personal and business transactions are separated, money management becomes easier. It will also help IRS figure out that you are sincere about your business.

Itemized Summary Statement: Most of the credit card issuers provide you annual summary statements showing itemized and categorized transactions. This helps you keep track of transactions and you can organize bookkeeping easily.

Build Business Credit: A small business credit card helps you build business credit which can be very helpful when you are to grow your business and need good credit line or loans.

Monitor Employee Spending: You can provide small business cards to your employees with limit. You can monitor and manage their spending by going through the statement.

Rewards: The credit card and business market is very competitive and various rewards and discounts programs are offered to small business credit card users which can help your business lower expenses.

6 Steps to Effective Small Business Credit Card Management

You have to take certain measures to manage your small business credit card effectively.

1. Apply at Institution with Pre-Existing Relationship:

When apply for a small business credit card, it is recommended that you apply at the financial institution from where you already have your financial relationships established like another credit card or checking account. It will help you your small business credit card approved as well as if you need a loan or line of credit. You can even move a part of your personal credit card credit to your small business credit card.

2. Limit Number of Cards:

If you sign up for multiple cards, you check the number as it can make it difficult to manage cards. It also can have negative impact on your credit rating.

3. Use Grace Period:

You apply for small business credit cards that offer grace period as it helps improve cash flow.

4. Pay Online:

You can pay online with your small business credit card rather than paying by mail or teller; it saves you time and money.

5. Say No to Cash Advance:

You shouldn’t opt for cash advances as it incurs charges and fees. If you need immediate funds, you rely on your business debit account.

6. Avoid Late Payments:

If your credit card payments are not paid on time, you will turn up paying late fees and high interest rates. It defeats the purpose of using small business credit card.

Apply for small business credit card, get it approved, use it responsibly and grow your business!

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