Small Business Credit Cards - The Advantages Of Paying Business Expenses With Credit Cards
By: Woody Alpern
Does it make sense for a business owner to use small business credit cards? You bet it does! There are numerous advantages to paying virtually all business expenses with a credit card. Let's examine a few of these advantages.Better Terms
Sometimes in business, you have to spend money to make money, and this can mean putting up cash on the front-end before you see any returns. Your options are limited - you can pay the money now in cash, pay with a credit card, or, if available, choose a net 30 term of payment.
Most small business credit cards offer a better interest rate and have fewer annual fee charges than individual cards. Credit card companies typically see a more reliable payment history for businesses than they do with individual consumers, so they give these business cards a lower interest rate. And, with the credit card market becoming more and more competitive, companies are lowering, and, in many cases, eliminating the annual fee.
This makes paying expenses with a credit card an attractive way to regulate cash flow. You keep your cash on-hand and can pay the bill off on your own schedule for relatively little additional cost.
Rewards
Many business-oriented credit cards also offer very attractive rewards programs that include cash-back incentives, airplane miles, gifts, and complimentary services. Some cards also offer savings from specific retailers simply by using the credit card to make the purchase. Why not pay all business expenses with a credit card and take advantage of these free rewards?
Many cards, such as the American Express Platinum Card, give the cardholder free membership into various airline clubs. This comes in handy for the traveling businessman. Airline clubs give the cardholder a nice private club atmosphere in nearly every airport that offers free wireless internet access, phone services, food and beverage, and a quiet place to relax.
Another benefit most cards offer their members is a concierge service that will assist you with getting restaurant reservations, tickets to concerts and sporting events, and many other services that can be useful for a small business owner. Some cards even offer free automobile and travel emergency services as well as free travel insurance.
Ease of Banking
Many small business credit cards offer free online reporting. This allows the business owner to pay their credit card bill, monitor expenses instantaneously, and review statement charges anytime online. Most cards can also classify the charges by business-related categories on a quarterly and year-end summary statement. This is very useful for the small business owner in preparing the company tax return as well as having a great snap shot view of seeing where and how the company is spending its money.
Consumer Protection
When it comes to business expenses, credit cards offer the same protection as for the individual consumer. This is an often-overlooked advantage of having a small business credit card. Paying business expenses with a credit card for gives the owner protection against fraudulent charges and, in many cases, an extended warranty over and above the manufacturer's normal warranty. Also, in the event you pay for something where there is fraud involved, the credit card company will protect you and reverse these charges, putting the burden of proof on the vendor.
Conclusion
Using small business credit cards to pay business expenses offers added security, convenience, and attractive rewards - financial and otherwise. And, they allow you to receive added financial incentives while regulating cash flow to meet the ebbs and flows of your business. With the growing market for business credit cards, you are sure to find an attractive credit card option that offers quality payment terms and fits in with your business needs.
About: Woody Alpern, CPA, is the founder and creator of MyCreditCard.com, an online service that lets you compare credit cards and choose the best fit for you. He is the co-founder of both Capital Investment Advisors and Capital Benefits Administration, Inc.. He is also a partner in both firms. In addition, he serves as CEO of real estate investment company Roswell Holdings, LLC. A graduate of the University of South Carolina with both a bachelor's degree and a master's degree in accounting, Alpern spent several years in the tax division of the accounting firm Touche Ross (now Deloitte & Touche) before partnering with Michael Reiner to found his own businesses. Source: Ezinearticles.com
What Makes Small Business Credit Cards Different From Corporate Cards
By: Richard Gilliland
Everyone in business is aware that business credit cards have become increasingly popular. Business credit cards have been receiving special attention from credit card issuers: They recognize the business potential created by the rising demand for business credit cards among small and home-based businesses, and are intent on tapping into it.The major credit card companies designed business credit cards purposely to address the needs of these small and medium sized companies. Wherever you look - on the Internet, radio and broadcast media, newspapers and other print media - you will find the card issuers advertising these business credit cards, and that the adverts specifically target small to medium enterprises. The point: to inform their target market about the features and benefits of their specific business credit card offerings.
So, how did the business credit card companies design their small business credit cards? Although there are variations from one business credit card package to the next, the basic features generally cover cash discounts for purchases of business-related supplies, a wide array of opportunities for rewards, travel privileges, frequent flier miles, and very low annual percentage rates for balance transfers in their introductory periods. The small business credit card holder also receives periodic reports as rule, which summarizes purchases made on the business credit card account. These reports can normally be viewed online and can be downloaded into a QuickBooks file.
Like small business credit cards, large corporations have equivalent corporate business credit cards. These are markedly different because corporate business credit cards (or simply corporate credit cards), are specifically designed for the corporation itself and not for the individuals inside the corporation. Once a corporation decides to apply for a corporate credit card, the officers enter into negotiations with the credit card issuers to hammer out the specific features of the card and how the business credit card will integrate with the company’s finances and financial systems.
The corporate business credit cards are usually distributed to employees to use for those expenses they would normally incur on behalf of the company. Like small business credit cards, corporate credit cards also track the expenses incurred by each cardholder and individual reports are submitted to management. Because of the different, and often more complex, expenses incurred by large corporations, the system of reporting generally requires a specialized software application to resolve these financial complexities.
The single most significant difference between small business credit cards and corporate credit cards is the mode of payment. Generally, for small business credit cards, the credit card is the responsibility of the primary individual applicant who is also responsible for paying the balances or installments due. In the case of the corporate credit card, the credit card is issued in the name of the corporation. Primary responsibility for payment thus resides with the officers of the corporation.
The process of issuing a corporate business credit card is much more complicated than that of a small business credit card. For the small business owner who wishes to apply for a business credit card, it is quite simple actually; there are even websites where you can compare the different business credit cards and submit online applications once a choice is made. This is a luxury that a large corporate in need of a business credit card account, simply does not have.
About: Richard Gilliland Provides Expert opinions and reviews to help you Compare and Apply for a Credit Card - Compare Credit Card Offers with Credit-Wisdom.com - Unraveling the best in Personal and Business Credit Cards. Source: Ezinearticles.com
