Thursday, February 15, 2007

The Business Credit Card: Five Things You Need To Know

By Max Anderson

Too many business owners think they can run their business by charging business expenses on their own personal credit cards rather than using a business credit card. If you're one of them, you may want to rethink that policy.

Using a personal credit card for business purposes can turn into quite the disaster. Fortunately, by understanding the five following business credit card facts, you can avoid the common business credit card pitfalls.

1. You've Got To Keep It Separated

If you run a business and keep charging your business purchases to your personal card rather than a business credit card, things are going to get messy. And sooner or later, you're going to mess something up. Because keeping proper business records is critical to the success of your business, you should avoid using your personal credit cards for your business needs.

2. Don't Pay More Than You Have To

Some business owners assume that a business credit card will carry a higher interest rate than a personal credit card. Don't fall for the myth. It's just not the case. Just like the personal credit card market, the business credit card market is filled with competition,and getting a great interest rate is just a matter of shopping around

3. Take All You Can Get

Having a business credit card isn't just good for financing business purchases; a business credit card can also help you out with some additional business-related perks. Many business credit cards allow you additional cards for employees, automatic insurance protection on purchases you make with your business credit card and rewards programs (minus the high interest rate usually associated with rewards cards).

4. Your Business Needs a Credit History

No matter how you may feel, you and your business are two separate entities. Just like you need your own credit history, your business needs to establish its own credit history as well. One of the best ways to do this is with a business credit card. By obtaining and using a business credit card, you will begin the essential process of building your business's creditworthiness and paving the way for future business credit opportunities.

5. Be Prepared to Guarantee It

If your business has never had a business credit card before, you'll probably need to guarantee your business credit card personally. Think of it as co-signing for your business. When you do this, not only are you building your business's credit history, but you are also adding on to your own personal credit report at the same time.

Now Is The Time

So whether you are starting a brand-spanking new business or you have been running a business without a business credit card for a while, now is the time to get the ball rolling and apply for the business credit card that will best serve the needs of your business. There's no time like the present to put a business credit card to work for you.

For more tips on getting the best business credit cards, saving money and avoiding getting taken, check out, a website that specializes in providing credit card tips, advice and resources.

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