Why You Need a Small Business Credit Card

Many of us with small and home businesses don’t think a lot about getting a credit card.

After all, what do we need with a business credit card, when everything is so…small?

However, a small business credit card can be a good move for just about any small business — even if you don’t think that you need one. There are advantages to having a credit card in the name of your small business.

Here are some of the advantages of having a small business credit card:

Build Credit for Your Business

One of the biggest reasons to get a small business credit card is to build credit in the name of your business.

You don’t always want to use your personal credit as part of your business financial reputation.  When setting up a business, think about the ways it should be separate from your personal life.

Your credit is one of those things.

Eventually, you might want to expand your business, and you may need loans to do it.  As a result, it makes sense to build business credit separately.

When you have a solid business credit history, you are more likely to get the loans you need in the future.  A credit card is one of the best ways to build your business credit, and create a solid foundation for the financial reputation of your business.

Track Expenses

why you need a small business credit card

Small business credit cards offer you business many advantages in helping you run your business.

It’s important to keep your business expenses separate from your personal expenses.

If you expect to deduct business expenses on your taxes, you need to make sure that they are truly business expenses, and that they are separate from your personal expenses.

This is very important.

Using your business credit card simplifies the record keeping, and it ensures that you have a backup for your claims on your taxes.  Many accounting software programs, like Quickbooks Online, can pull your credit card information into the program to help you quickly reconcile your purchases.

Ease of Use

Credit cards are easy to use.

They are accepted almost everywhere, and they are easier to carry than a wad of cash.  It’s easy to swipe a credit card to cover your expenses, and it makes sense to do so.  No matter where you go, if you have a business expense you can quickly and easily cover it with your business credit card.

Build Rewards

Many small business credit cards come with rewards.

Credit card rewards can help you put your spending to work for you.  As you spend money on your business needs, you earn rewards that can benefit you further.  Statement credit, cash back, travel rewards, and other perks can help your business.

Look into credit card rewards offered by various small business cards.  You might be surprised at what you can gain from savvy credit card use.

Purchase Protection and Fraud Protection

Credit cards come with their own set of protections.

Your purchases are protected in many cases with a credit card.  From rental car insurance to warranties to price protection, your business credit card could come with perks that can ensure that the purchases you make are protected.

Additionally, you have fraud liability protection.  If someone steals your cash, it’s gone and you can’t get it back.  However, if your credit card is stolen, you aren’t liable for fraudulent purchases.  That protection offers peace of mind that’s hard to get elsewhere.

Ease Your Business Cash Flow

Your small business credit card can also provide you with just what you need to ease your cash flow.

Sometimes, between payments from others, and what you need to pay to others, it can be difficult to match up your finances.  Slow payments from those who owe you money can create a budget crunch.

Credit cards, though, can ease your cash flow situation.

Use your credit card to make business purchases and pay bills in order to free up the cash you need to make payroll.  Being able to make manageable payments later can be a big help when day to day operations are considered.

Employee Use

As your business grows, you may need to allow your employees to make purchases on behalf of your company.

A business credit card can help you with this.

Your business credit card account should have room for employee cards.  You can provide trusted employees with a credit card that they can use for business trips, and to make business purchases.  This can be helpful, since it allows you to free up some of your time, and reduces the need for tedious paperwork associated with reimbursing employees for out of pocket expenses.

And many card allow you to earn rewards or cash back on their purchases.  Plus, many allow you to easily track their card use and you can put limits to how much they can use their card.

Bottom Line

Your small business can probably use a credit card.

You receive a number of perks, and you are able to easily keep your business spending separate from your personal spending.  Plus, there are a number of conveniences associated with a small business credit, from allowing others to make purchases on behalf of your business to the protections they provide.

Before you write off the idea of a business credit card, seriously consider the benefits.

Do you have a small business?  Do you have a business credit card?  Which one?

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Published or updated April 13, 2013.


  1. My blog is a small business but right now I am just a schedule c sole proprietor. What requirements do the CC companies have to get a.card.and will they transfer it to a new name if I set up an LLC down the road?

    • Odds are right now you will get a card that’s personally guaranteed, meaning it’s a business card but it’s your credit. This still helps you build company credit though.

      About the name, do you have an EID for the business or are you using your own personal SSN? You might want to call a credit card company and see how they will handle it.

  2. I have had credit cards for various businesses I owned. I like the convenience and accumulating rewards (frequent flier miles). I do not have one now, but that may change over time.

  3. Do you have any recommendations on where to look for the best biz credit cards? Through your bank? Are there any particular offers you recommend?


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