Small Business Credit Cards
What's the difference between a personal and small business
Small business credit cards are a special type of credit cards that are meant for use by small
(as opposed to the normal credit cards or personal credit cards which are meant for the use of an
Some people wonder why they should go for a small business credit card when they already have one or more
personal credit cards.
This is a very valid question indeed. By logic, if credit cards exist specially for small business in market as
a separate entity altogether, there must be a ‘special’ need for it. It must have some features which are useful to
small businesses in particular.
Though there are a lot of similarities between a personal and small business credit card (of course there would
be similarities since both of them are credit cards after all), there are a few differences
These differences are mainly in terms of the flexible credit limit, lower APR offers and attractive terms and
conditions which are better for business credit cards.
Besides all the benefits which are quoted for credit cards and the additional attractive
offers, there is another important reason for going for a small business credit card. The reason is
‘business expense accounting’.
A lot of small businesses face this is as a major challenge. One needs to keep track of each and every business
expense and log the information somewhere for the purpose of business expense accounting.
Business expense accounting is needed not only for tax purpose but also for financial strategy
evaluation and budget tracking. Generally speaking, two main problems quoted for small business expense accounting
are – business expense segregation and expense classification.
By using your credit card for small business for all your small business outgo, you can very easily separate
your business expenses from your personal expenses.
This will thus solve your business expense separation problem. What you receive on your small
business credit card bill is your business expense directly. Moreover, this report is something which your tax
consultant will love too.
The second problem is also solved automatically. Most business credit cards for small business
also group together the business expenses under proper heads.
Some credit cards even provide credit card statement as data feeds which can be directly fed into accounting
software. Just imagine how much hassle you are saved from with this business accounting feature. Wonderful, isn’t
The other great thing about small business credit cards is the help they offer in terms of
managing the expense peaks. Though such variations are part of almost every business, they are even more critical
for small businesses.
So when that need for immediate purchase arises, you wouldn’t need to worry if you had the backing of a small
business credit card.
Also, generally small business have to ‘pay first and receive later’ i.e. make payments for purchases before
receiving payments for services/goods, so small business credit card also acts as an intermediary who fills in the
time gap at little or no additional cost.
The credit card membership benefits are at its best when it comes to small business credit
cards. There are discounted ticket offers, car rental offers, gift offers and many other good offers for business
credit card holders.
Just check all such benefits that might be available on your small business credit card and ensure that you use
them whenever and wherever required.
The small business credit cards are ranked higher
by the credit card suppliers too. So everything associated with a small business credit card, including the
customer service, is better than the personal credit cards.
Thus, small business credit cards aren’t something that a
small business owner can afford to miss especially with what all it offers.