Only when your company is a startup can you be able to get off with placing your operating cost on a personal credit card. But as your business expands, your growing customer base and consumer requirements may push you to consider a business credit card to ensure you better meet your client needs. Credit cards usually come with some advantages that appeal to small upcoming companies.
But it isn’t always mandatory to apply for a business card, so how do you tell if it’s time to get one? Discover six indications your micro-business needs to shift to a business credit card.
- You’re maxing out your monthly limit
If you always have to max out that personal card each month to run operations, it’s time to get a business card. Bear in mind that using up a large amount of your credit card balance may ruin your score. Good credit utilization shouldn’t exceed 30 percent. Getting a business credit card increases your spending limit and spares you the financial pressure.
- When you’ve started hiring
As soon as you begin bringing in new staff, you’ll need a business credit card. Honestly, you don’t want your personal credit card is used in the workplace anytime a worker needs to make a business purchase. Plus, the fact that many credit card providers in the marketplace offer a limitless number of free-of-charge cards on one business account makes it the best choice. Some cards even allow you to set spending limits for every employee.
- When your rewards are not worth the effort
Business credit cards are known for offering rewards modified to meet different business, needs. They can also earn you rewards on everyday workplace expenses like internet services, office supplies, electricity bills, and so on. Therefore if you realize your personal card’s bonus doesn’t line up with your company spending, consider upgrading.
- When incorporating your company
If you decide to incorporate your business — say, changing it into an S corporation, C corporation or LLC — upgrading to a good business card is most times a wise financial move. It safeguards your finances and personal assets in case you incur company debts or losses.
- When it’s time to start building business credit
Just like you receive individual credit reports, your company should establish business credit and be awarded a score based on your credit performance. This is because; every time you seek business funding, creditors & lenders will examine your business credit score to establish if you are eligible for the loan or extra credit. If you fail due to bad credit, there’s always the option of merchant loans bad credit.
Doesn’t that sounds like something that will benefit you in future? Well, why not start building business credit today?
You could enjoy several benefits from a business credit card, however before applying to get one, ensure to look up your credit score. This way you improve your chances of approval.