Effective Small Business Credit Card Management

Summary: The use of credit cards in small businesses is gaining popularity. An industry study conducted by a research group reports that more than two-thirds of small businesses are making use of credit cards to cover expenses. However, only two-fifths of these credit card using businesses employ business credit cards. Since these small business owners are already using credit cards to provide financing for their businesses, they should consider converting to business credit cards ...

The use of credit cards in small businesses is gaining popularity. An industry study conducted by a research group reports that more than two-thirds of small businesses are making use of credit cards to cover expenses. However, only two-fifths of these credit card using businesses employ business credit cards. Since these small business owners are already using credit cards to provide financing for their businesses, they should consider converting to business credit cards instead. With prudent usage and wise management, the small business credit card could be an effective business tool to help small business owners "grow" their businesses. Among other things, a business credit card allows you to separate business transactions from personal charges, thus avoiding potential problems in managing your funds and preparing your tax reports. A business credit card also conveys the message to third parties who take an interest in your financial transactions, such as the IRS and creditors, that you are managing your business and its financial accounts in a professional manner. A significant benefit of having a business credit card is the year-end statement summary that business credit card issuers provide to their cardholders. This detailed listing helps you to itemize and classify your business expenses. The small business credit card is a good way of building your business credit. By being judicious in the management of your business credit card accounts, you will strengthen your credit standing. This will be an important factor when you need additional financing for growth or expansion purposes. The responsible management and sensible use of your business credit card cannot be overemphasized. Some ways of achieving this include: