Business Credit Cards
Business credit cards are very similar to standard credit cards but generally they have many additional benefits as well. This is one the most competitive segments on the credit card market and every major issuer does not miss the opportunity to take part because business credit cards do have a good turnover and the profits are lucrative.
From the point of view of the business owner a business credit card is also great because it is a convenient form of credit, expenses can be tracked and significant benefits can also be arranged for. Credit cards become more and more popular as an instrument to finance one's business, no matter if it is a startup or an established company. Additionally, credit cards provide extensive reports and the monthly credit card statement can be used directly in accounting, instead of having to sum up thousands of separate invoices.
Most business credit cards allow to separate expenses into personal and business, thus making it possible to keep track of exactly how much was spent on what. So, business credit cards are not used only by company owners and executives but are issued on behalf of employees as well. Some issuers don't charge additional per card fees, when you are already a client of theirs, so you can get multiple credit cards for co-principals and employees almost free of charge.
Another benefit of business credit cards is that they generally offer lower interest rates. The reason is that companies are regarded as a less risky payee than the average Joe and you can get business credit cards with interest rates as low as 3% a year! But again, you need to be cautious because low interest rates could be a catch – for instance it is possible that the interest rate is that low only during the introductory period and then it soars. So you need to watch out if the low interest rate or the benefits are a bait or not.
Generally business credit cards are famous for their higher limits. It is quite possible to find a credit card that offers a credit limit of $100,000 or more, or even business credit cards that set no limit at all but again, make sure to read the fine print because if the lack of credit limit is compensated by high interest rates, than it is hardly a bargain, or at least not for you.
It can be legal to get tax benefits because of your business credit card usage but before you start spending like mad, consult a lawyer or an accountant about what can be deducted from taxes and what not. For instance, if you use your business credit card to purchase equipment, this could be deductible but if you use it to pay for massage, don't count on deducting this money from your taxable income.
Usually business credit cards offer extensive benefits programs. Frequent flier points are one of the most typical examples but rewards can include many other benefits, like different types of insurance, cash back, souvenirs and so on. Some of the rewards can really be lucrative, for instance the frequent flier points are great for a company in which employees travel frequently on business but again, think twice – you might be paying a really high price for these “free” benefits.