Should You Get a Small Business Credit Card?

Aug 23, 2012

Most banks are now offering credit cards specifically created for small businesses. These cards can offer a multitude of benefits, according to Catherine Clifford, who recently wrote about small business credit cards for “A business owner can usually get a higher credit limit on a business card than on a consumer card, and typical rewards include business-friendly discounts, like on shipping and office supplies,” Clifford wrote. “They also help keep business and personal finances separate.” Like with any credit card, there are potential downsides. To help determine if securing a small business credit card is the right move for you and your business, Clifford suggests asking yourself the following three questions:

1. Do you really need it? “Most consumers already have four or five credit cards in their wallets but only really use one,” she wrote. “If that’s you, then consider designating one of your personal credit cards for business purposes only.”

2. What are you going to use it for? “If you plan to make large purchases with the credit card that you can’t pay back immediately, your top priority should be to secure a card with the lowest interest rate you can find,” Clifford wrote. “But if you’re looking mainly for convenience, such as ordering monthly supplies that you plan to pay off each month, then search for the card that offers the best rewards programs.”

3. How organized is the rest of your financial life? “If you aren’t on top of all of your bills, you run the risk of having your interest rates raised without advance warning on a business credit card,” she wrote. “While the Credit Card Accountability Responsibility and Disclosure Act protects consumers from predatory pricing, business cards are not covered in the law.”

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