How a Business Credit Card Boosts Your Company

Business credit cards are short-term financing resources designed to specifically aid businesses in making purchases, managing expenditures and building credit, which is tied to a company’s financial history. While they are similar to personal credit cards, business credit cards differ by typically having higher credit limits, unique rewards programs, controls and more.

Whether using a single card for the business, or multiple cards for use by employees, business credit cards are a good fit for expenditures that can be paid in the same month, especially those that are recurring or important to track and organize.

Business credit cards are available to businesses of all sizes, from large corporations to nonprofits to sole proprietorships, and they can be especially valuable to small and new businesses looking to build long-term credit and standing.

• Increased cash flow: Business credit cards often offer higher credit limits than personal cards, enabling businesses to access more capital during slow periods or gaps in orders. However, it is good practice to settle balances by the end of each month to avoid accumulating interest and/or additional fees.
• Organization: Not only do business credit cards help keep personal and business expenses separate, but many business credit card accounts also offer combined billing to track all expenditures from multiple employee cards, helping to organize all commercial activity in one convenient place.
• Credit building: Although an owner’s personal credit will often be used to qualify, a business card can help establish business credit, a key factor for obtaining funding and effectively navigating later stages of growth. Use a business card to successfully build business credit in similar ways as personal credit: avoid using more than 30 percent of the total credit limit, make small, consistent purchases and pay balances early or on time.
• Simplification: With wide payment acceptance and features that track expenses, business credit cards solutions can simplify the financial administration of a business.
• Security: Like personal cards, business credit cards offer advantages like chip technology and fraud alerts to help keep capital and information safe.

What types of benefits do business credit cards have?

Along with significant signing bonuses, business credit cards often offer reward programs similar to personal cards, allowing cardholders to accrue points toward benefits in various categories, such as:

• Travel
• Merchandise
• Gift cards
• Statement credits
• Cash back

The offerings can have significant impacts on business. For example, companies that require employees to take frequent flights and overnight trips may benefit from a travel-specific card, small businesses may seek a card offering a zero percent annual fee or lower-than-average APR, and bigger companies might enjoy opportunities for rewards points that balance out higher fees.

What to keep in mind for business credit cards

• Although an owner’s business credit card purchases won’t affect their personal credit or financing qualifications, they are likely to be held personally responsible for payments if they are late or delinquent.
• Cards often have higher APRs than alternative financing sources, so a business loan or line of credit may be better suited for larger expenses, or for expenses a company does not anticipate paying off in the short term.
• Keeping personal and business expenses separate is not just a benefit — it’s often required by card providers and important for tax purposes. Separate expenses can save time and accounting fees and help simplify the process if a business is audited.

When used prudently, a business credit card can be invaluable to building credit and setting a business up for future success and long-term growth. To learn more about business cards or other resources that can benefit businesses, visit FNB’s Knowledge Center, Business Credit Card or Lending Options.