Skip to content

Business Credit Cards – Why You Should Have One

As a business owner here in the UK you may have been avoiding the use of a credit card for your business for any one of several reasons.  You may be afraid of running up debts that will make a steady cash flow more difficult to achieve.  You may be worried about how the credit card may affect your credit score.  Maybe you’ve just been so busy that you haven’t got round to choosing and applying for a business credit card.  These are all very good reasons for avoiding the use of a business credit card, but we’d like to take this opportunity to let you know of the advantages to small businesses of using one.

Build your Business Credit

According to a survey carried out by Manta (one of the largest online resources for small businesses), a massive 72% of business owners don’t know what their business credit score is!  This means that they’re not taking the opportunity to build strong business credit.  Business credit card activity is reported to commercial credit reporting agencies which can help build business credit.  To develop strong business credit scores you’ll need to ensure that all payments are made on time and to keep your debt use low. 

Relish the Rewards

You’ll have worked hard to launch your business and it may be quite some time before you begin to reap the rewards of this labour.  You may need to put your own pay check on hold while you settle payments to suppliers or make sure your employees are paid.  You may find yourself working extra time (at nights, weekends, holidays) in order to grow your business and take it to the next level.  At some point, you’re going to need to take a break and the rewards from your business credit card may offer you the leeway you need in order to have a weekend away or a holiday.  Business credit card rewards may help you to pay for a holiday, a gift for the family or even a treat for your employees to show your appreciation for all the hard work they’ve put in helping your business to launch and grow. 

Whether the rewards are frequent flier air miles, free checked luggage or an upgrade when you fly, the rewards offered on a business credit card are often far more than you would get as a normal consumer.  The reward may even be cash back – let’s face it, we’re all pleased to receive some extra cash and will find a good use for it.

Credit card companies want small business owners as cardholders so the reward programs they offer reflect how much they value these customers.

Quick Cash

If you’re facing some unexpected costs for whatever reason (it could be the materials to complete a job, a potentially lucrative opportunity or an unexpected upfront cost), you may find that you’re short of the necessary funds.  If you don’t already have access to credit, you could find yourself facing expensive options such as merchant cash advances or cash flow financing.  However, a business credit card will carry a lower rate of interest than cash flow financing and will be immediately accessible.  You’ll enjoy the flexible repayment terms which will allow you to make minimum payments while you attend to the job at hand and you can repay the balance when the funds are available.

Security

Credit cards are the safest and most secure way of paying for your business purchases.  If the card is fraudulently used you’ll be protected against unauthorised purchase.  Moreover, if there’s a billing error or if supplies you purchased is not delivered as agreed, you can file a dispute with the card issuer. 

Business credit cards are a valuable tool for the small to medium business owner, one of the safest and most flexible methods of payment.  Keep tabs on both your business and personal credit scores and make sure they are strong.