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Managing and growing your business with credit, and business credit cards

Here at fundify.io, we strive to find businesses the RIGHT loan based on their needs and financial goals. This will be one of the few articles you’ll find that doesn’t push any specific credit card and anything linked in this blog is NOT commissioned. 

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Here at fundify.io, we strive to find businesses the RIGHT loan based on their needs and financial goals. This will be one of the few articles you’ll find that doesn’t push any specific credit card and anything linked in this blog is NOT commissioned. 

Given we’re in the business of helping businesses make good financial decisions and access more financial loan/lending opportunities it would be amiss of us not to discuss The Business Credit Card. When used properly, it can be an invaluable tool.

Continue reading if you want to know more about Business Credit Cards, tips, and tricks to using and managing them as well as some other important information.

What Is a Business Credit Card?

A business credit card is a credit card designed specifically for business-related expenses. Business owners, executives, and employees can use these cards to pay for a variety of business expenses, including:

  • Purchasing supplies and equipment
  • Paying for services
  • Covering travel expenses
  • Managing other operational costs

Business credit cards often come with a range of benefits, such as:

  • Rewards programs
  • Cashback incentives
  • Discounts on purchases

These cards typically offer higher credit limits than personal credit cards and include tools and services to help businesses manage their finances more effectively.

Some business credit cards may require a personal guarantee, meaning the business owner is personally liable for any debts incurred. Others may not require a personal guarantee but may have stricter creditworthiness criteria for the business to qualify.

 

Benefits of Business Credit Cards

  • Enhanced Cash Flow: Business credit cards help manage and improve cash flow by providing a revolving line of credit.
  • Expense Tracking: Many business credit cards offer detailed expense tracking and reporting tools.
  • Higher Credit Limits: Compared to personal credit cards, business credit cards generally have higher credit limits.
  • Rewards and Incentives: Earn rewards, cashback, and discounts on business-related purchases.

What Is the Difference Between a Business Credit Card and a Small-Business Credit Card?

The terms “business credit card” and “small-business credit card” are often used interchangeably. Both are designed for business use, offering similar benefits and features, such as:

  • Rewards and cashback on business purchases
  • Expense tracking tools
  • Ability to add employee cards with customized spending limits

Some issuers may differentiate the two by offering lower credit limits or different rewards programs specifically for small-business credit cards. However, the core functionalities remain the same.

What Is the Difference Between a Business Credit Card and a Corporate Card?

While both business credit cards and corporate cards are used for business expenses, there are key differences:

  • Ownership: Business credit cards are typically owned by the individual who applies for them, whereas corporate cards are owned by the company.
  • Liability: With business credit cards, the individual cardholder is personally liable for debts. With corporate cards, the company is usually liable.
  • Credit Limits: Business credit cards often have lower credit limits compared to corporate cards, which are used for larger expenses.
  • Employee Cards: Business credit cards allow you to add employee cards with customized spending limits. Corporate cards are often issued to specific employees with predetermined limits.
  • Rewards and Benefits: Business credit cards offer rewards and benefits for individual cardholders, while corporate cards offer rewards geared towards the company as a whole.

Top 5 things to consider when getting a business credit card:

  1. Rewards and benefits: Consider the rewards and benefits offered by the card, such as cashback, points, miles, and travel benefits. Choose a card that aligns with your business needs and spending patterns.
  2. Fees and interest rates: Consider the fees associated with the card, such as annual fees, balance transfer fees, foreign transaction fees, and late payment fees. Also, pay attention to the interest rate, which can impact your overall costs.
  3. Credit score requirements: Consider the credit score requirements for the card. Some cards require a high credit score, while others are more lenient. Check your credit score before applying and choose a card that you are likely to qualify for.
  4. Spending limits: Consider the spending limits on the card, as well as any restrictions on certain types of purchases. Make sure the card offers enough flexibility for your business needs.
  5. Reporting and tracking: Consider how the card reports to credit bureaus and how you will track your spending and payments. Choose a card that offers clear and easy-to-use reporting and tracking tools

What is required to qualify for a business credit card?

To qualify for a business credit card, you typically need to meet certain eligibility criteria set by the credit card issuer. Here are some of the most common requirements in no particular order:

  • Business entity: You need to have a registered business entity, such as a corporation, sole proprietorship, partnership, or LLC.
  • Business credit history: You may need to have an established business credit history, which can be established by opening accounts with vendors, suppliers, and lenders and paying bills on time.
  • Personal credit history: Your personal credit history may also be considered when applying for a business credit card, as the issuer may want to assess your ability to manage credit and make payments on time.
  • Revenue: You may need to have a minimum annual revenue or sales to qualify for some business credit cards.
  • Documentation: You may need to provide documentation to prove your business entity, such as articles of incorporation, business license, or tax ID number.
  • Ownership and responsibility: You may need to be an owner or authorized representative of the business and be responsible for the card and its use.

Important Information

Fundify provides financial education services through blogs, posts, templates, and support documents to inform and educate on various financial topics such as budgeting, investing, and small business finance. These resources are not a substitute for professional advice from a certified accountant or financial advisor.

Clients are responsible for their financial decisions, and Fundify is not liable for any damages or losses resulting from such decisions. The information provided is general and may not be suitable for all individuals or situations.

We encourage clients to seek advice from certified professionals for specific financial guidance. Fundify does not endorse specific financial products or services and is not responsible for third-party information or links provided.

By using Fundify’s financial education tools, clients acknowledge and accept these terms. For more information, please review our Terms of Service or Privacy Policy on our website.