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Credit cards are essential to our daily lives because they make it convenient to pay for essentials and splurges with just a tap or swipe. If you have your own business, a business credit card can assist you in paying for expenses that are required to purchase supplies and run your daily operations. Business cards, like personal credit cards, offer the option to earn points, miles, or cash back on your spending and finance significant purchases.
Business credit cards are used to separate your personal expenses from your business expenses. Having a business credit card with high credit limits can assist you in smoothing out short-term cash flow issues without having to use working capital loans. High-limit business credit cards are necessary for fast-growing businesses to enhance their spending power. Personal credit scores are a major factor in determining credit limits for many legacy card issuers, which leaves founders with limited spending capacity.
There are certain business credit cards that have only cash back or statement credit as rewards. These rewards programs tend to give you a small reward for spending, which is similar to the cash back rewards on personal credit cards. The amount of business credit card fees can quickly add up. We’re not only talking about annual fees. It’s important to consider all potential fees when selecting a business credit card, including hidden fees, even though there are some no annual fees for business cards.
Typically, issuers of business credit cards have to personally guarantee their company’s debt. If your business cannot pay its bills, your personal assets will be put on the line. It’s a risky proposition, especially for startups. Card issuers that offer business credit cards without personal guarantees typically require a significant revenue or operating history for your company. Many growing businesses are faced with the choice between risking personal assets or settling for credit limits that are too low.
We recommend applying for a business credit card if you are building business credit, if you need to monitor employee spending, too earn rewards or cash back, for better expense management or for any business expenses. Check out our top rated and most popular business credit cards in October 2024.
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