subject: Tips For Using A Business Credit Card [print this page] Tips For Using A Business Credit Card Tips For Using A Business Credit Card
If you are like most business owners then you don't have a business credit card. Why would you not want a business credit card? A business credit card does more than just let you buy things on credit, you can purchase all your materials and even pay employees with these cards. The answer that I get most often when I ask people why they don't have a business credit card is that they use their personal cards. Is this the smartest idea, I don't think so.
The smartest thing to do is to protect you and your family by not having everything in your name. And in order to do this you will need to establish business credit so you can pass this debt onto your business. I am not telling you to put your business in debt rather than yourself, I am telling you that it won't do the business any good if the owner has so much debt that he is constantly worried about it. Make sure your debt is your debt and your business debt stays separate.
Now that you know why you need business credit I want to give you a few tips on using business credit cards. First of all never use the business credit card for anything other than business expenses. The reason why you don't do this is because your credit card company is supposed to hold you are records for many years, so even if 2 years down the road the IRS wants to audit you then you have your records right there, you just call and get your records faxed. And now days it is even easier to get your records because of the power of the internet.
One thing that you must do if you have a company that requires more than one person to have a card is to get multiple cards under one account, but make sure it has a tracking feature so you can keep track of who spend what and when. If you ever get audited you don't want you lack of planning to be the only downfall. And I know all about this, I had to pay the IRS over $10,000 one year because my wife who also had a card put a few purchases of her own on the credit card and they excluded the entire month. So don't make the same mistakes I did, and set up multiple accounts.
The biggest thing about a new business credit card is to make sure you have a good one with a decent interest rate. If you are a new business and you don't have much credit as of yet then you won't get the best interest rate, so just be patient. The great thing about a business though is that you get higher limits and better rates than a personal credit card because with a business you have assets. Make sure you go out and get a business credit card today if you do not already have one, but if you do make sure you follow these few tips.
