Is Your Business Ready For Its Own Credit Card?


By Ryan Velez

In the beginning of your small business, you’re going to rack up a lot of early milestones. That first sale, launching a website, and bringing on employees. It’s almost too many to keep track of. One of these that may not seem as exciting, but is just as important, is getting your first business credit card. This is an indicator of not just that your business has enough credit to get one, but also a sign that you have further plans to come. Here are some things to keep in mind from Nav.

If you are looking to finance your business, your best option is an SBA loan, allowing for low-interest rates, long repayment terms and an affordable down payment. However, credit history often factors into your ability to get one. A business credit card is a great option if you have ambitions of getting an SBA loan for an expansion or something similar, as using it and paying it off each month will start to establish a credit profile for your business.

Sometimes, the nature of your business means that getting a credit card may be more of a priority. For example, if you travel a lot for business, a company credit card will allow you to make purchases and help you keep track of them. Bookkeeping is important, especially when you start thinking about taxes. Not to mention, there’s the potential of using a business credit card to get airline miles. One example is Delta frequent flyers using co-branded cards with American Express and earning miles for every dollar spent.

By the same token, some businesses require a lot of supplies or inventory brought. Trade credit can cover some of this, but not all, which is when a business credit card comes into play. According to Nav, if you plan on using a card for this purpose, “look for one with a low APR to avoid paying a lot of interest on purchases. Some cards also reward business owners with double points when used at gas stations, office supply stores, or home improvement stores, so be sure to look for these perks when researching cards.” By the same token, no matter what your motivations for getting a business credit card, you may want to use something with cash back, something any business owner could benefit from. This is the best fit for those that pay their balance in full every month, as APRs can leak into cash back earned.