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5 Benefits of Business Credit Cards


Woman on phone looking at credit card

Choose the best business credit cards for your company

The right credit card can be a powerful tool to support your small business or scale your side hustle. A business credit card helps you build a strong business credit history, which is separate from your personal credit rating.

A dedicated business credit card can help you effectively manage expenses like fuel, inventory, equipment, supplies, or other timely essentials. However, these 5 benefits of business credit cards give you more than just spending power.

1. Keeping Business and Personal Expenses Separate

This is the first rule of small business bookkeeping, and a dedicated business credit card can make it much easier. Rather than sorting through stacks of receipts, bank statements and check registers, having a dedicated small business credit card keeps all your business expenditures recorded in one place. To help you manage your finances, credit card issuers provide digital reporting tools that let you view, categorize and connect your data with your accounting software, saving you time and money each month.

2. Tracking Employee Spending

A business credit card is an easy way to track and reimburse employee spending. Providing a credit card for team members to regularly buy supplies or cover travel expenses can deliver major operational efficiencies while also boosting safety and oversight. Business credit cards come with online card management tools that let you monitor transactions in near real-time and set custom limits to restrict usage to certain merchant categories, times, places or dollar amounts.

3. Racking Up Credit Card Rewards

Many business credit cards come with valuable rewards programs, signup bonuses and other perks geared specifically for commercial use. The type of credit card rewards you get vary depending on your typical business practices and choice of card. You could earn extra cash back or rewards points for spending in certain categories like air travel, office supplies or fuel and fleet. As for what to do with those rewards, the choice is yours – you can either put them toward future business expenses, distribute them as employee bonuses or use them for personal spending.

4. Enhancing Cash Flow

Cash flow is the lifeblood of any small business. The beauty of credit cards is that you can delay payments until the end of your monthly billing cycle – without keeping your vendors waiting. Business credit cards typically give you a grace period of up to three weeks between your purchase date and payment date. Delaying a single payment by a single day could give metrics like days sales outstanding (DSO) and days cash on hand (DCoH) a boost. You can amplify this advantage by timing large or recurring charges towards the beginning of your billing cycle.

5. Building Credit

Depending on your business’s legal entity type (sole proprietorship, LLC, S corp, etc.) and the type of card you select, you may be able to use a business credit card to start building a strong business credit profile. This separates your personal credit rating from your business’s credit rating and establishes your enterprise as a responsible, independent entity. By following the same best practices for using a personal credit card – paying your bills on time, avoiding high balances, and limiting credit utilization – you can earn high scores and qualify for bigger loans at better rates down the road.

Tips for Success

If your credit is in good standing, business credit cards are relatively easy to get and they can be packed with perks. But as with any financing tool, they require careful consideration and oversight. Here are some best practices to keep in mind:

  • Use business credit cards for short-term financing only. Accrued interest on unpaid balances can quickly get out of hand. To spread out payments on a bigger-ticket item, consider a business term loan or business line of credit.
  • Develop clear rules for card use. Issuing cards to multiple employees can streamline your operations, but it can introduce additional risks if you don’t have spending policies and controls in place.
  • Scrutinize the terms and perks. Look for a business credit card with no or low annual fees, no-fee cash advances, a discounted introductory rate, and/or rewards that add value to your business.
  • Monitor your credit regularly. Business credit cards can help you to build business credit, but they often require personal guarantees, which means your personal credit could take a hit if there’s fraud or misuse.
  • Understand the tax implications of credit card rewards. Cash back and rewards points aren’t considered taxable income, but if you use them for business purposes, you can’t treat those items as (fully) deductible expenses.

Choosing the Right Business Credit Card

Choosing the right business credit card is an important step in managing your business finances. At WesBanco, we can help you weigh your options to find the best business credit card for your needs. If you need help exploring your business credit card options we’re here to help.

Explore Business Credit Cards

Content is for informational purposes only and is not intended to provide legal or financial advice. The views and opinions expressed do not necessarily represent the views and opinions of WesBanco.

While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.

Neither Strategy Academy nor its sponsoring partners make any warranties or representations as to the accuracy, applicability, completeness, or suitability for any particular purpose of the information contained herein. Strategy Academy and its sponsoring partners expressly disclaim any liability arising from the use or misuse of these materials and, by visiting this site, you agree to release Strategy Academy and its sponsoring partners from any such liability. Do not rely upon the information provided in this content when making decisions regarding financial or legal matters without first consulting with a qualified, licensed professional.

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