Small Business Credit Cards


Aug 22, 2022 By Triston Martin

If you're a business owner, you've probably been offered numerous applications and offers for a business credit card. It's a great option to boost your business's purchasing capacity. Credit cards for small businesses give the business owner easy accessibility to a rotating line credit with a fixed credit limit to purchase goods and take cash out. Much like a consumer credit card, the small business credit card comes with an interest cost if the balance isn't paid in full every billing cycle.

There is a possibility to apply for credit cards through your bank or online. You can check out the terms and benefits by reading the best business credit cards from Investopedia's roundup review or through our reviews of each credit card which contain a section that compares the card in question against other cards.

Business credit cards could be a great way to access quick finance for your short-term requirements and increase your company's purchasing capacity. It's typically advertised as a desirable alternative to traditional lines of credit. As with all sources of finance, a business credit card has costs and should be handled with care.

Setting Credit Card Limits

Every company should be able to establish clear spending guidelines that include what expenses can be billed to cards, the amount employees can spend, as well as the frequency they can utilize their cards. It's essential to set the policy on paper and have each employee given the card read it and confirm it.

Once they have done that, you should give every cardholder a copy of the document to refer to. If the business card is, you might be able to establish restrictions that restrict transactions to a particular budget, dollar value, or even specific dates and times. Certain cards can set specific restrictions for every employee. For instance, you could restrict one employee to $50 per every day during the week to purchase gas and limit another employee to $100 in gas purchases and $50 per meal every day, however only on business days.

Being Watchful of Card Activity

Alerts can be configured to notify you every time the transaction occurs or only if employees use (or attempts to make use of) the card in a way that is not approved. You may also use mobile and online banking to check your account's up-to-date activity. Your accounting team should review every report to ensure every line item you see is an authorization charge.

Using the Card Wisely

It is important to determine the appropriate time to utilize credit. This isn't always the ideal option, particularly for expenses that cannot be paid off in full before the interest starts to kick in. While it may take more effort to obtain loans from banks or other lending institutions, it's usually financially beneficial to take this route since credit card interest rates tend to be higher than secured credit instruments. There is also the possibility that the purchase of a significant amount or a few major expenditures could eat up your credit card, leaving you with no source of money at all.


Easier Qualification

It is possible for business owners who don't have a good credit score to be able to get a revolving line of credits by using a credit card, particularly if it's secured instead of a traditional term loan or line of credit.


Credit cards are the best financial convenience. Business owners can get funds to make purchases or cash withdrawals faster and more easily than locating cash or using a checkbook.

Financial Cushion

A credit card could help business owners get the financial security they require if accounts receivables are in a deficit or sales are slow and the company needs cash.

Bookkeeping Assistance

In addition to an annual statement, many cards provide users with records-keeping tools to help manage their accounts. This includes an annual account summary that will help the bookkeeper track how they categorize and manage expenses. It will make bookkeeping easier and assist when working with outside experts to navigate the tax audit process and make tax payments, as well as provide an easy method of monitoring employees' spending.


More Expensive

The ease and convenience of credit cards for small businesses have a cost because they typically have an interest rate much higher than a small-business loan or fixed line of credit provided by the bank. This interest can mount quickly if card usage is not paid in time and in full every month. Furthermore, without a system to continuously and meticulously monitor the usage of cards, it can be very easy to overextend your business's financial resources by exceeding its credit limit or triggering penalties and late fees.


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