Business Credit Cards
Business credit cards are important for your company, just like personal credit cards are important for you. You want to build your credit history with your business and one way to do that is with a business credit card. You can also destroy your credit history, so you need to be careful how you use them. You want to make sure that you use the cards responsibly and make your payments on time.
You can use these cards for many things in your company. You can use them to hire more employees, buy more inventory, or increase the size of your building. You can use them for just about anything your business needs. You can even use it for day-to-day business expenses.
You can get these cards almost anywhere. You could go to kredittkortinfo.no/bedrift to see what they have to offer. They usually have a wide variety of options for you to choose from. You could find just the right card for your company.
This article will help you to learn more about company credit cards. It will highlight some mistakes that you can avoid. You can also do more research to find the information that you might need. This will help you to find out what you need to know.
Common Mistakes
Mixing Personal and Business Expenses
If you have a business credit card, you want to use it just for business expenses. You don’t want to use it at all for personal expenses. Doing so would not allow you to separate these expenses during tax time. You wouldn’t be allowed to use your expenses as company expenses. These expenses would be disallowed by the IRS. This is especially an issue for companies with sole proprietorship. It is easy to use them for personal meals or household items. You don’t want to be tempted to do so.
Large Balances
You don’t want to carry large balances each month. It is better to pay these off each month so that you don’t need to worry about them. This might be difficult for you to do, but it is important. If it is impossible to pay the balance in full each month, try and pay most of it. Carrying large balances each month will increase your interest. If you pay off your card in full each month, you will avoid interest altogether. This is a healthy practice to get used to so that you build your credit. Not doing so could harm your credit score.
Wrong Type
You don’t want to choose the wrong type of card. You want one that fits your business. If you travel a lot for your company, you might want a card that has travel miles. If you don’t, you might might want one that offers cash back. There are also cards with zero interest for an introductory period if that is what you need. You don’t need to avoid cards that have high annual fees because these fees could be outweighed by the perks that are associated with them. You need to consider the pros and cons of all the cards that you are looking at. You don’t want to choose the first card that you come across because it might not meet your needs. You want the card to fit your needs, or it won’t do you any good.
Rewards
You can earn all the rewards in the world, but they won’t do you any good unless you use them. You need to redeem them to get the full advantages of the card. You don’t want to let them expire because many of the rewards will do that. You want to use them before this happens. Your rewards can be used to benefit your business. You can use the travel miles if you are going on company trips. You could use your cash back to pay debts that need to be paid. The fact is that you can use them however you want to benefit your company. You don’t want to lose out on them because you let them expire.
Sharing With Employees
If you have employees, you will be tempted to give them cards for their business expenses. You can do this if you are careful, but you should give them limits. Choose a card that allows you to set limits so that even the most loyal of employees won’t be tempted to use it for items that are not allowed. You could also restrict certain stores so that your employees won’t be tempted to spend money there. Some perks that you can set besides store restrictions might be spending limits, monitoring spending, and other things that will help you. You can then use these receipts for tax purposes to show company expenses. It will also allow you to set future spending limits based on what was needed in the past. This will help your business to prosper.
Late Payments
You want to make sure that you make all your payments on time. Late payments lead to late fees that you don’t want to pay. It can affect your credit in ways that are much worse than if you miss a payment on a personal card. You don’t want this to happen because it will cost you more. Some ways that can affect your credit are higher interest rates, penalty fees, and damage to your business credit score. This will all affect your credit and your ability to get business loans in the future. By making your payments on time, you can avoid all of this. You don’t want to injure your company in any way.
Reporting Fraud
You want to report fraud as soon as you are aware of it. If you see pending charges that you don’t recognize, you need to report it to your credit card company immediately. You don’t want to wait until it is too late, and you have lost money. Even small charges can build up over time. Some criminals will charge a small amount to your card to see if you catch it. If you don’t notice it, they will gradually make larger and larger charges until they have taken a large amount of money from your business. If you don’t report these small charges, you are allowing the criminals to take advantage of you. You don’t want this to happen to your company.
Virtual Credit Cards
You are missing out if you are not using virtual credit cards. These are even more secure than typical cards: https://blog.google/products/google-pay/what-is-a-virtual-card/. You can use them to make online purchases and to pay employee expenses. . You can use them almost the same as a physical card. You can turn these on and off as you need them so that fraud is less likely to occur. This makes it safer to use for you and keeps your business safe. You can use your physical cards when going to a brick-and-mortar business and your virtual card everywhere else.
Closing a Card
You can close a card too soon and it can cause issues. It can affect your credit history in a negative way. If you close your card, it will decrease your total credit limit. This will affect your credit utilization ratio. You don’t want to decrease this because it will hurt your company credit score. If the card that you close is an older one, you also might decrease the average age of your credit. This will also affect your credit score in a negative way. If you are choosing to close a card, you want to make sure that you weigh all the pros and cons before you do. There may be no need to close a card.
Applying for Too Many Cards at Once
It is possible for you to damage your credit score by applying for too many cards at one time. Too many hard hits will lower your score. Applying for too many at once might also raise a red flag that will stop any efforts for you to get a card Instead of applying for too many cards, consider preapproval offers first. Preapprovals do a soft hit on your cards and won’t hurt your scores. This is one way to protect your scores. There are other ways to get around it, you just need to research to find them.
Conclusion
There are many mistakes that you need to avoid when getting a company credit card. These mistakes can cost you money and ruin your credit score. You don’t want to do this, so you need to be aware of these mistakes. The more aware you are, the better chances you have to increase your credit score. Some of the mistakes that you could make could also ruin your business. Giving employees cards without limits could allow them to charge more than you could afford. This might make your business go under.