When Is Your Business Ready For A Credit Card & How To Get It

credit card

When you finally take the plunge and open your business, you will have a lot of expenses to think about, especially in the beginning. There is rent in case you don’t have your own space, there are utilities, company equipment and supplies, as well as anything else you need to pay for and get in order to be able to do business in the first place. I have a question for you, though. How will you pay for all of this stuff?

If you are like most people, then you probably won’t have that much cash lying around, meaning that you’ll use your personal credit card. There is absolutely nothing wrong in doing something like that, especially when you are still in the early stages of business. Yet, at some point, you should start thinking about switching to a business credit card instead of using your personal one for those costs, as that could be a much smarter option. In case you’re not entirely sure how these specific cards work, you can click here to get some more information regarding that.

So, there comes a time for all the digital entrepreneurs when they have to switch to a business credit card and use it to cover their company’s costs. If you want me to tell you when the time is right for you to do that, then you certainly have some wrong expectations, because there is no specific time-frame that I have to share here. That is mainly because every single company is different, meaning that there is no one solution and one specific moment in which all the firs will decide to switch to a business card. It all depends from company to company.

Since there is no particular rule that I can give you here regarding when it is that you should switch to a business credit card, you are now probably a little bit concerned since you don’t know when to do this and you don’t want to end up being too late, or perhaps too early, to this party. Well, I can undeniably understand why you might be a bit confused and worried about this, since this is probably your first time running a business and going through this specific process. That is why you don’t know when the time is right to get a business credit card.

My understanding probably doesn’t do you any good here, though. In other words, it is not enough. Instead, you want and need to get some more detailed information on the period in which you should start thinking about getting a card for your company, because you have no idea when to do it. Well, the good news is that I will definitely talk about that a little bit, meaning that I’ll share some thoughts on the time-frame, as well as let you know about a few signs you should be on the lookout for – signs that say your company needs a credit card.

company needs a credit card

When Is Your Business Ready For A Credit Card

As mentioned already, we are now going to have a closer look at the readiness of your company for a credit card. You probably don’t want to get this financial tool if you still don’t need it, since it comes with certain fees that you would probably much rather avoid. At some point, though, you won’t be able to avoid those fees because you’ll realize that they are much more favorable than the ones you might be getting from your personal credit card. In different words, you will at some point realize that a business card is a more reasonable and a more sensible solution.

Here are some benefits of it that you should get familiar with: https://www.cnbc.com/select/benefits-of-small-business-credit-cards/

Now, if we are talking about time-frames here, the truth is that you can get one of these financial tools the moment you start your company. Yet, you don’t have to do it immediately. Instead, it would be a much better option for you to wait for a while until you have properly set everything up and until you have established your firm perfectly. You don’t need to wait to earn a lot of money in order to do this, though, because you will undoubtedly notice the moment when your personal card will start doing you more harm than good, which is the moment you should switch to a business one.

Above I have told you that I will talk a bit about the signs that will give you an idea that you need to switch to this specific card, so it is now time to check those out. Remember, however, that this doesn’t mean you should look for all of those signs in your firm before deciding to get this financial tool. Sometimes, only one of these signs will be enough to urge you to make a change, and that’s perfectly normal.

perfectly normal

1. Personal vs. Business Expenses – It’s All Getting Confusing

When you start noticing that you can no longer tell apart your personal expenses from your business ones, it might definitely be time for you to make a change here. Everything gets charged on your personal credit card and you have a hard time later on discerning what it is that you’ve spent on yourself and what it is that you’ve spent for your company. Of course, most of the time it will be easy for you to differentiate between those two expense categories, but things can also get quite mixed up at one point or another. So, when things get mixed up, that should be a clear sign for you that you need to make a change.

If you don’t really understand why differentiating between those expenses is even necessary, let me make that clear. There might be various reasons for this, but the one you always need to remember is the fact that business expenses are tax deductible, while personal ones aren’t. So, when you separate those expenses, you’ll have a much easier time when it comes to doing your taxes and, of course, things will also be simpler if there’s a government audit.

2. The Personal Card Is Highly Restrictive

Most of those personal cards that you can get will have a rather low spending limit, meaning that they just won’t work well for your company. So, when you realize that you are reaching those limits rather quickly and that you are having a hard time purchasing everything that your business needs, you should start thinking about switching to a business card. Don’t worry, though, this does not mean that the issuer will allow you to spend money without any limits, because we know that this isn’t a favorable thing for you, even though it might sound tempting in the beginning. Yet, the limits will be set much higher and you won’t struggle with the expenses.

3. You’re Not Earning Rewards

Certain cards offer some rewards when you are buying specific things, but the personal ones will mostly give out those rewards when you are buying, for example, groceries, or similar products. This means that you will be spending money to purchase things for your business and you won’t be getting any rewards, which is certainly not a favorable thing for you. Well, if you get a business card, you will have higher chances of getting those rewards because the offers won’t be limited to, say, groceries and similar personal purchases.

4. You Need To Establish A Business Line Of Credit

This specific sign is pretty obvious and I suppose there is no reason for me to dwell on explaining why you need to get a business card in this specific case. One thing I do have to mention, though, is this. When you get a business line of credit, you can rest assured that it won’t affect your personal credit score, because it will actually all be connected to your company instead of being connected to you personally. That is a rather big deal, if you ask me.

4. if you ask me

How To Get One For You

If all of this has helped you realize that you absolutely need to get a business credit card, you will now be burdened with a slightly different question. Simply put, you will want to do this right away, but you might not really know how to do it. Well, that is absolutely understandable, especially if you are new to the whole idea of running a company and managing the finances. Yet, even though you might not know right now how to do this, the good thing is that you will easily be able to learn, since things are not that complicated. All you have to do is put some effort into it and understand the steps you’ll have to take (additional info).

The most significant thing to remember is that you will have to choose a good issuer, i.e. a good provider, because you certainly don’t want to end up working with companies that won’t have your best interest in their mind and that will simply work towards ripping you off, so to speak. Sure, all of these firms will need to have a way to earn from their services, but that does not mean that you should agree to some unfavorable terms just so that you can get this card and start using it. Instead, you should take as much time as you need to find some favorable and reasonable offers, i.e. issuers that will be able to offer you amazing terms and fees.

Apart from checking out those fees, you should always be aware of the fact that you need to work with highly experienced and reputable providers, as that will be a sort of a guarantee that any of the problems that you might come across in the process of using your business card will be easily and swiftly solved. Some issues are bound to arise from time to time, but having a good provider means that you will be able to rely on them to get those issues fixed in no time, which is certainly highly significant. So, in short, in addition to getting good fees, you want to find reputable and experienced providers.

It would be a good idea to ask around and talk to some people in person in addition to doing your online research regarding these providers and issuers. That will help you get a clear picture on how good certain companies really are in this line of work, or how bad they are for that matter. When you talk to a few people or find and check out some online reviews, you’ll be much closer towards making a final decision and ensuring that you are choosing the best provider and, thus, the best business credit card for you.


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