The Benefits of Low Interest Business Credit Cards

The Benefits of Low Interest Business Credit Cards

by Peter Lisdorf

Best credit cards for business have many benefits that are not gained when using traditional credit cards. The main purpose of all business credit cards available is to make purchases on behalf of the business and have an accounting for business expenses. But, these type of credit cards are also a line of credit for your business. But in general credit cards for business should be paid off each month in order to keep the owner in good credit standing and to improve the chances of getting business loans when necessary.
The small business credit cards we see today are usually in the name of the owner of the company. This person's credit history is directly effected by the activity of the credit cards in his or her name. For small businesses, the credit card companies will require this person to be on the record as being responsible for repayment of all purchases made using the credit cards issued. So the ability to get the credit card is based most directly on that person's credit card rating, rather than on the financial stability of the small business.

Good low interest business credit cards have special summaries provided with bills or on a regular basis that helps categorize the business expenses. This can make taxes and budgeting much less difficult for the business owner, while also providing a type of receipt for the business owner. Everyone using the credit card must be authorized to do so, and the credit card owner is protected against unauthorized charges that are made.

If you have a good interest rate, it may occasionally be cheaper to put your small business investments onto your credit card for short periods of time, rather than taking out a high interest rate small business loan. Of course you need to be responsible about what you carry on your card. You should only use it for credit when absolutely necessary to improve your small business profits. Fortunately, most of your business investments will be tax deductible and you will have a record of them.

You have to resist the urge to use your low interest business credit cards for personal use. It will make tax season a mess when you have to separate out expenses and provide proof of which items are indeed for your business. It gets particularly cloudy if you have to pay interest on your credit card purchases and you have to calculate how much interest was for the business and how much interest was for yourself. You will have to show very clear calculations of such personal charges with your taxes and you risk having many business expenses disallowed out of the confusion.