Even if you don't run a company, a business credit card can help you separate out finances and rake in extra points
- Using a business credit card for company or freelance expenses can help you manage your cash flow and control employee purchasing.
- With options like the Business Platinum® Card from American Express and the Ink Business Preferred Credit Card, you're also earning valuable points you can use to book travel.
- Zero fraud liability, travel insurance, and purchase benefits protect your business from some unexpected losses.
If you own or manage a business, you deal with countless questions and decisions each day. One decision that nearly every business should say yes to is getting a business credit card. And this applies if you freelance or have a side gig, too - you don't need to run a company with several employees to qualify for many business credit cards.
A business credit card comes with a long list of benefits tailored to business owners' needs, and many of these perks come in handy every month. I use my own business credit card to pay for every single business purchase and get rewarded for doing so. If you've been on the fence about a business credit card, these features and benefits may inspire you to pull the trigger.
Manage your cash flow and expenses
The most practical reason to get a business credit card is to manage your business cash flow. Unlike employed workers with a salary, businesses tend to earn income that is less predictable - it can fluctuate from month to month and season to season.
Where a debit card takes the cash from your checking account instantly, a credit card gives you a month or more to pay interest-free. You can also set limits for each individual card to make sure your business spending doesn't get out of control.
Simplify your bookkeeping
If you run a business, bookkeeping is not optional. While you can try to cobble something together in time for your taxes, it's much easier to keep on top of things on a regular basis. Some business owners do their own bookkeeping using a program like QuickBooks or Xero. Others outsource to a service like Bench or eDataQuick.
In either case, if you use a credit card, the issuing bank will automatically track your purchases for you. That can link to your bookkeeping to expedite and simplify the process of entering your expenses. That leads to easier and more timely reporting as well as quicker tax preparation.
Top business credit cards for rewards and perks
Right now, I use the Ink Business Cash Credit Card from Chase for my business purchases. That gives me rewards that I combine with my Chase Ultimate Rewards points from my personal card for free and discounted flights, hotel nights, and other benefits. So if you have the Chase Sapphire Preferred Card or the Chase Sapphire Reserve for your personal spending on dining, travel, and more, having the business card gives you yet another avenue to earn valuable Chase Ultimate Rewards points.
Here are some other great business credit cards to consider
The Business Platinum Card from American Express - This higher-end card gets you access to luxury airport lounges around the world including American Express Centurion lounges, Priority Pass Select lounges, and others. This is a credit card benefit I can't live without! You also get up to $200 in annual statement credits for Dell purchases (paid semi-annually and upon enrollment), among several other benefits.
Capital One Spark Miles for Business - If you're looking for a straightforward option, this is a solid choice, as it earns 2 miles per dollar on every purchase. You also get an application fee credit of up to $100 for Global Entry or TSA PreCheck.
Ink Business Preferred Credit Card - This card has a strong sign-up bonus of 80,000 points after you spend $5,000 in the first three months, and it earns 3x points on the first $150,000 you spend each cardmember year in combined purchases on travel, shipping, internet, cable, phone, and advertising with social media sites and search engines.
Travel and purchase protections
The Ink Business Preferred Card offers cardholders bonus rewards in popular business spending categories including shipping purchases and social media advertising, but the value of the card doesn't end there. This premium card comes with purchase and travel insurance that can save you money and protect your purchases.
For example, the card includes new purchase protection that will cover new items against damage and theft for 120 days after purchase up to $10,000 per claim and $50,000 per account. It also offers rental car coverage and trip cancellation and interruption insurance that will even pay for your hotel night if you get stuck in an airport due to bad weather, among other benefits.
Credit cards also provide $0 fraud liability in almost all cases. That means if your card is stolen or used without your permission, you are not responsible for paying any of the cost.
Build business credit
Some businesses need to borrow funds to pay for inventory, finance off-season expenses, or fund expansion. If your business doesn't have its own credit history, you could wind up having to put a personal guarantee on the loan.
If your business has its own credit history, it may qualify for borrowing on its own without putting your personal assets on the line. If this is important to you, make sure your business credit card is properly reported to the business credit agencies like Dunn & Bradstreet and Experian.
Remember, you don't have to run a giant company to use a business credit card. I run a business with a single employee and have used four different business credit cards in the past. From airport lounges to travel insurance to purchase protection, there are a lot of reasons to get a business credit card.