Things to know about a small business credit card include advantages and disadvantages.
Advantages include access to funds and a great way to track expenses.
These can be great tools for any business.
A lot of business cards also offer lots of perks that can give added benefits to your business such as travel miles and cash back on purchases.
But there can be disadvantages too and these are often overlooked.
As with personal credit cards, businesses can easily overuse cards, especially those with high credit limits, and wind up carrying too much debt.
So keeping some dangers in mind early can prevent you from having troubles later.
What Are Some of The Drawbacks? One fact that often surprises business owners is that your personal and business finances can be combined if your business is not well established.
That might not sound like a big deal, but if your young business gets into trouble with poor credit habits you could wind up being personally liable.
For example, if your business is only a year or two old, late or missed payments will show up on your personal credit report.
Other possible dangers can occur when employees have access to your small business credit card.
Without tight controls in place, employees can run up large charges for personal items and leave your business liable for them.
There are also fewer safeguards for small business credit cards compared to consumer cards so fraudulent charges are harder to resolve and harder to remove from your credit report.
You will also have to be ready for higher interest rates and service charges.
How Can You Minimize The Drawbacks? As with any credit card, the disadvantages of small business credit cards are usually the result of poor management.
If you use your business cr.
card carefully and make sure that your employees do the same, you will minimize the risks involved with its use.
While small business credit cards can be very helpful to your business, there are risks to using them.
By taking precautions with their use, you will be able to enjoy their benefits while minimizing their dangers.
Advantages include access to funds and a great way to track expenses.
These can be great tools for any business.
A lot of business cards also offer lots of perks that can give added benefits to your business such as travel miles and cash back on purchases.
But there can be disadvantages too and these are often overlooked.
As with personal credit cards, businesses can easily overuse cards, especially those with high credit limits, and wind up carrying too much debt.
So keeping some dangers in mind early can prevent you from having troubles later.
What Are Some of The Drawbacks? One fact that often surprises business owners is that your personal and business finances can be combined if your business is not well established.
That might not sound like a big deal, but if your young business gets into trouble with poor credit habits you could wind up being personally liable.
For example, if your business is only a year or two old, late or missed payments will show up on your personal credit report.
Other possible dangers can occur when employees have access to your small business credit card.
Without tight controls in place, employees can run up large charges for personal items and leave your business liable for them.
There are also fewer safeguards for small business credit cards compared to consumer cards so fraudulent charges are harder to resolve and harder to remove from your credit report.
You will also have to be ready for higher interest rates and service charges.
How Can You Minimize The Drawbacks? As with any credit card, the disadvantages of small business credit cards are usually the result of poor management.
If you use your business cr.
card carefully and make sure that your employees do the same, you will minimize the risks involved with its use.
While small business credit cards can be very helpful to your business, there are risks to using them.
By taking precautions with their use, you will be able to enjoy their benefits while minimizing their dangers.
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