Related Sponsors

What is the best way to use Business Credit Cards?

Home » Accounting » Business Credit Cards » What is the best way to use Business Credit Cards?

Most experts recommend avoiding the use of credit cards of any kind to provide startup funds for a business, but if a business uses personal credit cards for those first few dollars of necessary purchase power, it is imperative that credit cards only be used temporarily. As soon as possible, credit cards should be relegated to occasional use and be replaced by more traditional forms of business finance.

There are several ways business credit cards can be used wisely to benefit a company:

Purchasing essential equipment such as telephones, fax machines and printers,
Purchasing office supplies and other daily operating essentials, such as receipts, paper, and cleaning supplies,
Temporary cash flow assistance,
Short term loans at a low interest rate if the item(s) purchased can be paid off before the introductory rate ends,
Assisting with the sorting of tax-deductible expenses by referring to the monthly credit card statements, and
Offering extra time between the purchase of goods or services and having to pay for them with company cash.

The warnings against the abuse of business credit cards are the same as those against misusing personal credit. Accrue too much too quickly without a reliable source of funds for repayment and the business could face hefty finance charges, late fees, and soaring interest rates. Personal credit cards have proven to be the financial ruin of many consumers and wise business owners will avoid the over use of business credit cards just as savvy consumers do.

Next Page: What should a business do before applying for a Business Credit Card?

Related Business Credit Cards Articles