Banks and financial institutions have made it easier for large businesses to operate seamlessly and small businesses as well as startups to expand continually. Although startups incur expenses on a lower scale as compared to major corporations, they tend to maintain their day-to-day expenses using different sources of finance. In addition to small-ticket loans, business credit cards come in very handy for their businesses.
Business credit cards help operate the business
A business credit card helps enterprises segregate their personal spending from their business expenses. Whether a sole proprietor or a partner in a joint venture, any individual with a steady flow of income can apply for business credit cards. However, there is a different eligibility criterion for these cards in terms of documentation and income proof. These cards are available for banks, government-run establishments, small businesses, as well as sole proprietors. In order to avail of the card, the applicants need to show their revenue statement.
Benefits of business credit cards
The cards are beneficial to the employer as well as the employee. While the employer may track the expenses and analyze the same, the employees may do cashless transactions on it. A dedicated credit card for the business will make it easier for businessmen to justify their expenses in the tax forms. It will reduce the fuss and maximize the transparency while filing income tax returns. Further, business cards have a better credit limit, which is basically determined by the ability of the business to generate revenues in the future. It will allow an employee to run the business without any lags. These cards can also be used to handle a range of expenses, which include travel, entertainment, utilities, and business maintenance.
A few additional benefits of the card are:
- Most business cards offer a range of cashback offers, discounts, and flier miles on the purchases and booking
- The company that offers maximum rewards is usually preferred by businesses
- Every business card comes with customized offers. If a business spends more on travel expenses, they can look at cards, which offer them better deals on the booking of hotels and flights. The more customized the offers, the better the card.
Myths about business credit cards
There are a few myths about business credit cards, which should be ignored. Two of the major ones are mentioned below:
- Myth: Only major corporations can get a business card.
Fact: The cards can be owned by anyone with a legitimate business. The bank only requires an application and the profit and loss statement of the business.
- Myth: Business credit cards come with hefty joining fees.
Fact: Many come with no joining fee at all.
In short, business cards are a convenient way of keeping the expenses in check and adding transparency at the operating end.