Do Recently Started Businesses Need A Business Credit Card?

Nowadays, being self-employed has become a awfully popular idea

. If you are one of these individuals, taking significant steps to get started will be required. Obviously, the fundamental of these steps is to make a home workspace that is separate from your living quarters. And, with the bulk of business being performed online, a professional website is perpetually beneficial. While these are the initial tasks that someone should consider when starting a business, it is also pertinent to think about developing credit for your company.

Getting a business credit card is highly important to a new business owner. In nearly all cases, business credit cards should be kept different from personal credit cards. For example, this will probably make it far easier for you to keep a record of expenses that are tax deductible and protect your private assets no matter what happens with your business. On the other hand, The Credit Card Accountability, Responsibility, and Disclosure Act (or CARD Act) solely covers personal and not business credit cards, meaning that business credit cards are not governed by its good provisions. Credit is an important part of growing a secure business but if you have decided that the provisions encompassing the CARD Act are important to you, you ought to start out by designating one of your personal cards as a business credit card. Also, when you are the only employee of your business and you do not yet have adequate costs to warrant a different card, the business credit card might not be necessary.

Despite this, there are lots of business card rewards that should be contemplated. One of the most notable of these is that the business credit card generally comes with higher credit limits. The higher limit will allow you to stimulate the flow of cash for your business as well as permit you to spend money interest-free, assuming you are able to pay back the money when the bills are due. That said, a number of business credit cards have higher rates than personal cards which can be detrimental if you spend more than you owe and you cannot make the necessary payments. A number of business cards also provide perks and discounts which are not offered on consumer credit cards. For instance, American Express OPEN offers savings and discounts for small businesses on things that are required every day like office supplies.

Several business credit cards are accompanied by a fee that is due annually however if the card is used frequently, the value of the rewards can rapidly outstrip the cost of the fees. Many of these cards also offer records of the purchases that are made based upon their type which makes tax preparation an easier process. This often cannot be done with personal cards since these issuers are required to follow federal disclosure provisions.

As is the case with selecting a new personal credit card, you might want to take the time consider a number of options; for example, some issuers of business cards have opted voluntarily to follow CARD Act regulations. But in the final analysis, depending upon the needs of your business, a business credit card might be a tremendous benefit to both your company's credit as well as the success of your venture.

by: Jud Hogan

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