Every business needs cash to operate so small business owners sometimes secure business credit cards to provide needed funds. However, how each small business acquires cash and manages cash (and credit) are critical factors for business success.

Pros of Small Business Credit Cards

Getting business credit cards involves an easy application process, cards don’t require collateral, and they provide revolving credit that can be used as long as the balance is paid. Proper use of small business credit cards offers these benefits:

• Achieves increased overall credit limits for personal and business uses when utilizing both personal and business credit cards. 
• Helps to establish a good credit history for the business. 
• Provides potential access to other financial products that can contribute to growth. 
• Assists in the important separation of personal and business finances. 
• Provides a verifiable record of expenses and spending history. 
• Allows a business owner to delegate yet control employee spending. 
• Provides a way for a business to earn attractive credit card rewards that can be used as the owner desires. These can include cashback offers, travel protection, and discounts on rental car rates. 
• Adds solid expense documentation for tax time.  

Cons of Small Business Credit Cards

Small business credit cards come with these cons:

• The business owner/cardholder is personally liable for credit card use and balances. 
• Business credit cards often come with higher interest rates than those for personal use. 
• There is a risk of employee abuse. 
• They impact personal credit history.  

Tips for Wise Use of Business Credit Cards

• Understand the risks of overuse. 
• Make sure any employees who use the card know the rules of proper use. 
• Take advantage of introductory rates. 
• Shop around for the best card. 
• Never make late payments. 
• Deduct card interest from business taxes.  

Seek Expert Financial Assistance

Contact Increase Lending for financial solutions that will help your small business achieve success. Our financial professionals can help you secure funding to meet your business’s financial needs.