What are Business Credit Cards & How to Get One?

If you are someone who has been in the world of credit cards for months or years, you would have surely heard of the term ‘Business Credit Cards.’ And if you run a business, the thought of exploring this term might have come to your mind or maybe you directly want to have a business credit card. If it is so, you are at the right place as this article is going to make you understand what business credit cards actually are and how can you get one? It can be very beneficial in terms of business as it simplifies the expenses and helps the owner keep a track of all the spending. But before just applying for a credit card, you must understand everything properly and make a decision only after that. Read on to know more about business credit cards:

What Are Business Credit Cards?

Business Credit Cards are credit cards that are specifically used for business-related purposes and not for personal benefits. The company owner can have a business credit card or these cards can be distributed among all the employees so that they can make business-related transactions using them. Then the owner can pay the bill of all the cards once every month. It can help the owner keep a track of all the expenses and be updated. Like the standard credit cards, business credit cards also have their own advantages, which have been discussed further in the article.

How Do Business Credit Cards Work?

The function of business credit cards is very similar to that of personal credit cards. These are issued on a business profile considering the credit score of that business instead of the credit history of an individual. However, the credit score of the owner can sometimes play a role here. You can get a business credit card with a credit limit that you can spend using it and you also get an interest-free period to pay your outstanding amount without any extra charges. Moreover, you also earn rewards, cashback, or other types of benefits when you make spends using them.

Some people think that it is necessary to have a team and a big business in order to get a business credit card, but that is not always true. You can have it even if you run your business alone and it’s not really that big & popular. Your business just needs to be registered. If your business has no credit history or bad credit history, you might get a lower credit limit at the beginning, but the limit can be increased if you pay your bills always on time.

Benefits of Business Credit Cards

Track Your Business Expenses Easily: With a business credit card, you can keep your personal and business expenses separate and hence it will be easier for you to track the spends that are being made on your company. You can easily check how much amount is being spent on what as everything is mentioned on the credit card statement.

Also Read: Things You Must Look For In Your Credit Card Statement

Make Big Purchases Conveniently: When you run a business, you have to make big purchases very often, which is way easier to do using a business credit card than using cash. Keeping this in mind, business credit cards come with a higher credit limit as compared to personal credit cards. You can make expensive purchases on credit card EMI and pay a small part of the total amount every month.

Earn Rewards: When you spend any amount using your business credit card, you get rewarded for it. The reward can be in the form of reward points, cash back, or anything and you can use these points against various categories. For example, the HDFC bank offers a cashback of up to Rs. 1,000 every month on its business credit cards.

Build Your Business Credit: When you use your business credit card responsibly and make all the payments on time, it can help you build your business credit. You must use your business credit card carefully as a good credit score can help you get the cards with the best deals in the future.

How To Get a Business Credit Card?

You can apply for a business credit card simply by visiting a card issuer’s official website or by visiting your nearest branch with all the required documents. The process of application can be a bit longer than in the case of personal credit cards as you will have to fill in more details and provide relatively more documents.

Bottom Line

Business Credit Cards can be very beneficial in not only one but several ways. However, you might not get a lot of benefits at the beginning but once you start building your business credit score, you can apply for the cards with a higher limit and more benefits. The most important thing here is: you can keep your business & personal expenses separate, which is a must thing to do. Just make sure not to overspend and make all the payments on time to avail the maximum benefits of your business credit card.

If you still have any doubts, make sure to write them in the comment section below!