In this post, I will be going over exactly what a business credit card is, why you would need it, and how to use it effectively for your small businesses.
Personally, I am in the process of acquiring a business credit card for myself and I found it difficult to find all of the information that I needed in one place, so I thought that it would be helpful if I did that for you.
First, let’s go into what a business credit card is.
It is basically what it sounds like, a credit card intended to be used by your business. The major differences between a business credit card and the one in your wallet is that it is meant solely for business expenses. We will talk more about why now.
Why would you need a business credit card?
Anyone who is running a business for profit (or non-profit essentially) needs a business credit card in order to separate personal expenses from business expenses.
The reasoning behind this is that when tax time comes around, you will be able to deduct a majority of your business expenses from your taxable income, effectively lowering the amount that you will have to pay the IRS.
The IRS is very particular about what expenses qualify as business expenses, so you want to make sure that you are being clear with what you are trying to deduct. The process is a lot easier if you have a card dedicated solely to business expenses.
How do I qualify for a business credit card?
This process is actually much simpler than I would have imagined.
While the IRS is particular about what qualifies as business expenses, it is NOT all too particular about what qualifies as a business.
Basically, any venture that you are pursuing that you are aiming to make money off of could be considered a business.
This could be blogging, stock trading, freelance photography, there is a wide and almost endless number of possibilities of what could be considered a legitimate business.
So in order to get your business credit card, simply go on to a providers website and provides your businesses Tax Identification Number or your own personal SSN to get the ball rolling.
Whether you are approved or not depends on each provider and your own personal credit score. The higher your credit score, the more likely you are to be approved.
You may be required to provide information about: how long you have been in business, annual revenues and expenses, your job title within the business, business objectives, among others. Although you can also qualify for a business credit card even if you are starting a new business.
Here are some of the business credit cards that I would recommend:
- Chase Ink Business Unlimited Card
- Chase Ink CASH Credit Card
- CapitalOne SPARK cash for business
- Blue Business PLUS Card from American Express
Other Benefits to a business credit card:
- Increases the leverage that you are able to have with your business.
- The welcome bonuses tend to be more favorable and valuable with business credit cards rather than personal credit cards.
- The card is separate from your personal credit account, reducing the liability that you have connected to your company.
- Spending and Earning incentives.
If you want to learn how to make money from your phone or computer, like my Facebook Page The Centennial Investor and join our free private Facebook Group where you can connect with other stock traders like myself.
Thanks for reading!
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