Business Credit Card

The business credit card can be a great tool to improve the management of your business. This financial instrument makes it possible to control expenses and offers convenience to your employees.

Want to know how it works? So stay with us. We will explain everything about the business credit card in today’s blog post. (See also: Best Amex Business Credit Cards In Canada).

What is a business credit card?

The business card is a type of card that works in credit and debit modes, just like cards linked to your current account. The difference is that this product is specifically aimed at legal entities.

It allows you to make purchases, in cash or installments, on behalf of the company. Thus, it can cover all types of expenses, from the acquisition of new equipment to the expenses of a work trip.

What are the benefits of a business credit card?

The following are some of the benefits of business credit cards.

1. Cash flow organization

The use of the business card centralizes the company’s payments. That way, you can see how much money is leaving the account and which department spends more. The credit card statement can give you an idea of company cash flow without resorting to invoices and balance sheets. Many of these cards also comes with business management tools that give you more control over your business anytime and anywhere.

2. Miles and rewards programs

Business cards like Amex Aeroplan Business Reserve and Amex Air Miles Business associate spending with points programs that you can convert into airline miles. And, in some cases, you can use these points to pay other bills.

As business expenses can be much higher than personal accounts, this conversion of points can be even more advantageous.

3. Ease of payment

Employees also benefit. For example, all payments for meals and transportation can be linked to the business card on a business trip. That way, the employee doesn’t need to take money from the personal account and ask the firm for reimbursement later.

4. Financial planning

A more detailed notion of operating expenses still helps to calculate the average cost of the business. This information will be useful when you prepare your financial plan. After all, when you know how much you spend per month, it becomes simpler to design a revenue goal for the company to make a profit.

Business Credit Card Good usage practices

As in the case of cards for individuals, to make this payment method a strategic ally of your business, it is also recommended to use it conscientiously. Here are some basic tips:

1. Adequacy of the credit limit

You can negotiate with the financial institution the credit limit of the business card to adapt it to the needs of your business. If necessary, you can review this value, increasing or reducing it, so that it is more compatible with your business budget.

2. Punctuality in payments

The interest and charges charged for the installment of the outstanding balance of the business credit card are very high.

Therefore, it is essential to commit to the full payment of the monthly card bill. This is essential to avoid the risk of paying interest and charges that the card can generate in the case of a debit balance.

3. Improper use

The ease of spending with a business credit card can lead to excessive indebtedness, which should always be avoided. 

In conclusion

Using a business credit card allows you to build credit, earn rewards, and keep overhead low by financing large purchases. Be sure to choose cards that will provide you with various rewards and perks that benefit your business. Do not overspend on a business card, just like you wouldn’t on a personal one — you will be responsible for any debts you incur.