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Small Business Credit Cards: A Great Idea

by

Art Gib

Congratulations! You have started your own small business, and it’s a heady and exciting time in your career. Proper financial management of your new enterprise is absolutely vital to its success and even survival. Chances are you are your own bookkeeper and accountant: if you are, here are some words of advice about using credit cards for your endeavor.

A credit card specifically designed for business use has many advantages. You don’t want to get into the tangled web of mixing personal expenditures with work ones. To do so creates not only headaches for your own record keeping, but also serves as a giant red flag for the IRS. Get a credit card and use it only for your business with no exceptions made.

Keep up to date on the credit card payments to help your business develop its own credit rating. Just like with personal credit, a business needs to build its reputation for prompt payments and on-time transactions. If you choose to expand your enterprise or need extra money for new equipment, you may need the good record to help secure a loan later on. Make a habit of paying debts responsibly, and the future payoff will be well worth the effort.

A great advantage to using a small business card is that it makes keeping a handle on expenditures much simpler. Year-end accounting can be an experiment in terror if cash transactions are the norm for you. Credit companies provide regular statement summaries that can help you know exactly what your financial status is all year long, and particularly at the end of the year.

Be careful not to go credit-happy. Having too many credit cards for your business can create problems you don’t need, such as more complicated accounting.

Payments may be made online, which is convenient and cost-effective. Just keep in mind that any debt should be kept in proportion to your financial reality. Building up a large amount of debt and having to pay interest rates (or even late fees if that becomes a problem) on that loan completely negates any advantages to owning the card in the first place.

A credit card does not mean carte blanche for reckless spending. That’s as true in business as it is in our personal lives. Owning one for your burgeoning enterprise can be as much a liability as it is an asset. Exercising self-control and keeping a close accounting of your and your employees’ expenditures will go a long way toward your achieving the success you’ve always dreamed of.

If your commercial business needs the services of a reliable and professional

debt recovery

service, contact the best: Alexander & Hamilton (http://alhamco.com/). Art Gib is a freelance writer.

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