Should you get a business credit card?

Reporting and record-keeping
Using a business credit card simplifies separating business and personal expenses. Most business credit cards make it easy for you to categorise and track credit card expenditures because you receive special quarterly and annual statements that break down expenses by category and per employee. This is particularly helpful when you’re organizing your records for filing tax returns.

Employee cards
As a business owner, you can apply for cards for your employees (each with an individual credit limit that you can set). This makes purchasing easier and also helps you keep clear records. You won’t have to wade through one big, blended billing statement to calculate project costs.  Having expenses broken down by employee will help you manage expenses more closely and more importantly, ensure they are on budget. Lastly, you can maximise your earning of rewards based on employee spend on the program.

Loyalty programs
Loyalty programs, or the rewards a credit card company gives to its business customers, may be more generous than those for personal card holders. Some business credit cards give you air miles for purchases and/or points you can use for other rewards. Unlike consumer cards, businesses are still able to redeem rewards for certain airlines which gives you flexibility to use your points how you see fit. Other benefits, such as car and flight insurance and discounts on travel, are also available on business cards. Some programs provide you access to business articles, concierge services and information online, as well as pay-by-phone and pay-online options.

24/7 service
A good business card gives you 24/7 service both online and via live phone support staff every day of the year. This is really helpful for reviewing your budget and planning purchases.

Understanding business credit limits

Credit limits are the maximum amounts you can charge on your business credit card. As a business owner, you want a credit card that provides access to a credit line dedicated to your business. Most cards provide credit limits of up to $50,000 AUS but can be increased depending on the business creditworthiness and history with the bank.

You may find that you’re offered a business credit limit above what you anticipated, or you may be offered less than you’d hoped for. Your credit line is based on your personal and/or business credit ratings and creditworthiness. It is important that you manage your personal or business credit profile to ensure you have adequate access to capital to run your business.

How it impacts your credit

If you are the primary cardholder for your company, and the business credit card account is opened in your name, the status of your account may have an effect on your personal credit rating.
As the business owner, if you are jointly liable or if you guarantee the business credit card account, you have given your word and backed up your credit with your own personal assets. By making payments on time, you build your business credit rating, which can bolster your personal credit rating.

Beyond credit cards

Credit cards are what people think of first when paying business expenses. However, there are several other types of “cards” that can also be used to charge business expenses, each with a distinct set of features. They are debit cards, charge cards and cards issued by individual merchants. When used in conjunction with conventional credit cards, they provide additional flexibility and options for handling day-to-day business expenses.