business credit cards

Having lines of credit available is an essential source funding to any business. However, many new and small business owners think that using or applying for business credit cards will only create more expenses, so they try to keep spending contained by utilizing personal credit cards, which only puts personal and business finances at risk, rather than helping either situation.

Business credit cards improve your company’s credit rating

In the beginning, most entrepreneurs will not be able to get access to unsecured lines of credit. This comes with strong business credit ratings, which means the business itself will have to start building a positive credit score, in much the same way as people do.

Secured business credit cards

The best thing new business owners can do is get a secured business credit card. Much like personal secured cards, this is tied to the amount of money available in the company’s bank account. After using the secured card responsibly for a period of time, entrepreneurs will be able to “graduate” to unsecured lines of credit.

Business credit cards have higher spending limits

Personal credit cards can be useful for small purchases, but using them to help finance a business will have you quickly maxing them out, leaving you with large personal bills to be paid. Business credit cards, on the other hand, have much higher spending limits, and usually better interest rates than personal cards.


Once you register your business and have a decent credit rating, credit card providers will try to catch your attention is various incentives and rewards programs for using their cards. These programs are usually more in-line with business expenses than personal cards – just be sure to shop around before deciding on one. Some business credit card companies offer travel miles and discounts on hotels, which will not do you any good if you are running a small business out of a home office. Some will offer savings at various office supply stores. Others offer a cash back incentive, which is the most versatile. There are even some business credit card companies partnered with vendors and equipment leasing companies.

If you have a business credit card, you need to use it

New business owners are usually watching where every dollar is being spent, and tend to only use business credit cards in dire emergencies. The truth is, sitting on lines of credit does not help a business increase its credit rating. Even if the credit card is only used for buying the occasional ream of paper for the office printer, or coffee, those purchases affect the company’s credit rating. By making small purchases and paying off the balance on the card on or ahead of when the amount is due, a business can increase its credit rating to that golden “over 600” number, which opens the door to bigger and better financing options.