As a small business owner, you are aware that managing finances is a big responsibility. Having a business credit account can be a valuable tool in helping you manage these expenses. Here are three reasons why having a credit card is a good investment.
1. Covers Start-Up Costs
In the early stages of owning a business, there are many expenses and little profit. Having a credit card available allows you to pay your vendors on time and stay within your business budget parameters. Timely payment keeps you in good standing with them and also prevents late penalties and interest charges.
2. Keeps Expenses Separate
When you have a small business, you are responsible for managing all your expenses. This job can be challenging when you also have similar personal expenses. A credit card specifically for your business makes it easy to keep the costs separate. When it comes time to file taxes, it’s much easier because all of your business spendings are on one account.
3. Offers Rewards
For you to make money off your money, you need to get a rewards card. These can be cards that offer a percentage of cashback, give airline miles or cover travel expenses. When you use these types of cards, you get rewards based on the amount of money you charge to the card. That means you get money back for spending money, which you can’t do if you are using a traditional bank account. Many of these cards have high-interest rates, so it’s vital to pay the entire balance off each month, so you aren’t paying interest.
Credit cards provide many advantages to small business owners. They make it easy for them to cover start-up expenses, streamline paperwork for taxes, and offer rewards. All these things help create a successful business.