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Updated Jan 11, 2024

Spend Wisely: How to Get the Most Out of Your Business Credit Cards

Business credit cards can help you reach short-term goals, but you need to use them correctly.

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Jennifer Dublino, Senior Writer & Expert on Business Operations
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Small and midsize business (SMB) owners may need quick access to cash, but loans don’t always cover the gaps. As lenders tighten borrower requirements, many companies are turning to credit cards to fund their operations. Business credit cards are convenient and have a variety of features that make it easy to manage your finances and maximize your benefits. However, it’s easy to get into financial trouble when using them. 

Use this guide to find out how to get the most from your business credit card’s benefits and not fall prey to its pitfalls and temptations. 

Editor’s note: Looking for the right financing solution for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

How to use business credit cards wisely

You can use your business credit card as a tool to help you achieve your short-term goals. However, if used incorrectly, you’ll find yourself with a pile of mounting debt. Here are some smart ways to use your business credit card:

TipBottom line
Look at the benefits of your business credit card and ensure you can take advantage of the perks.

Pros and cons of business credit cards

While business credit cards have their advantages, they also have drawbacks. Being aware of both can help you maximize the benefits and minimize their disadvantages.

Pros of business credit cards

Cons of business credit cards

Easy to separate business expenses from personal expenses

Higher interest rates than personal cards

Accessible faster than a business loan

High risk of employee abuse

Organized cash flow

Personal credit impacted

Unique perks not offered on personal cards

Potential for overspending

FYIDid you know
If you have employees, it’s important to create a business credit card expense policy to ensure cards are being used wisely.

Tips for leveraging business credit cards

Business credit cards offer plenty of advantages, but misusing these beneficial tools can quickly turn them into burdens.

Just because your company makes regular payments on its credit cards doesn’t mean you’re using them wisely. Interest rates for business credit cards tend to be extremely high compared to other funding sources, which means you could spend more than your company earns. If you turn to high-interest credit cards during hard times, you could make a bad situation worse.

However, credit cards provide significant advantages for responsible borrowers. Cash back, interest-free periods and 60-day floats can help a growing company take advantage of short windows of opportunity. To get the most from the perks without suffering the drawbacks, take the time to learn the ins and outs of business card financing.

Consider these six tips when leveraging credit cards to finance your SMB:

Don’t pay interest.

Credit cards can help your business by quickly raising capital. Banks make little money off exchange fees, but they make plenty of money when their customers get into a cycle of debt. You should only use credit cards if you can do so without carrying a balance from month to month.

This should be common personal finance wisdom, but it’s easy to get so involved with growing your business that you fail to recognize bad habits until it’s too late. Credit card interest rates fluctuate based on the market, unlike traditional loans. This means you can easily negate future gains by paying higher fees — even if you think you’re beating the system. Maintain constant vigilance to avoid turning a helpful tool into an added expense. If you think you’ll be carrying a balance on a large purchase, it would be wise to get a business loan at a lower interest rate. 

Optimize benefits.

Many business credit cards have benefits traditional financing sources don’t offer. These perks can include discounts on travel and lodging or preferred pricing for services. Explore the market to see which cards offer the most relevant benefits to your company.

For instance, if you travel infrequently but spend a lot on shipping, don’t obtain a business credit card offering frequent flier miles. Different cards offer perks for shipping, advertising and travel. As competition for business credit cards heats up, a few lenders have started allowing businesses to design their own bonus categories. To avoid spending too much time optimizing card spending, find one or two cards that cover your specific business needs.

Watch for introductory offers.

Credit cards attract new users with all sorts of promises. Some advertise zero interest, while others entice applicants by offering thousands of points for new sign-ups. All offers come with strings attached, so read the fine print carefully.

Using racked miles or points usually requires you to meet a spending threshold within a certain time frame. Some offers require only a small amount of spending — like $3,000 — while others demand $20,000 or more.

A promotion can also end abruptly, leaving you blindsided. If your business floats thousands of dollars on a card, you could face a substantial bill when the introductory offer ends, costing you even more than the initial offer.

Track your financial statements.

You’ll need to watch your financial statements closely when swiping your business credit cards. Tracking statements gives you an idea of how your company is doing and helps you monitor your cash flow. Review your books each week, and note when your revenue is highest. Choose a date when you will have increased cash flow to make additional credit card payments to pay down your balance.

Avoid commingling.

It can be tempting to make personal purchases on your business credit card or business purchases on your personal credit card. However, this makes it difficult to keep track of your expenses and profits come tax season. It can also negatively affect your credit score if you miss a payment.

Hop cautiously — or not at all.

Credit card hopping is when you go from one card to another to get perks or rewards, such as cash back or zero-interest-rate periods. Cards often have introductory offers, and opening a new card account can allow you to take advantage of these.

However, you will need to research a card thoroughly before you choose it. You should also take careful note of annual and transfer fees. Consider whether it’s really worth making the change. If you’re switching to get rewards points you won’t use, or a lower introductory interest rate even though you pay off your cards before they accrue interest, there’s little benefit.

Opening new lines of credit will also lower your credit score, so it’s not wise to get new cards often. If you’re planning to apply for a large loan soon, it’s best to avoid credit card hopping so your score will be as high as possible.

Bottom LineBottom line
To get the most out of business credit cards, optimize perks, such as discount programs, rewards and low or interest-free loans, while minimizing fees.

How to get the most out of your business credit card

Even though business credit cards can be risky, here are some ways to use them to your advantage:

  • Utilize instant rewards. Some rewards cards, such as cash-back cards, automatically give you what they promise. Other rewards cards, such as hotel and airline rewards cards, have a threshold requirement before you can take advantage of them. To make matters worse, points can expire. Some cards also have partnerships with certain businesses in which they extend discounts to cardholders. If you need to buy something from those merchants, make the purchase before the offer expires.
  • Use purchase protection benefits. If your card has purchase protection, and you use it to buy a computer or other hardware that could break down, use this benefit to get it replaced.
  • Get an interest-free loan. Need to buy office equipment or another expensive item? Look for a card with a 0 percent introductory APR. Pay it off within the grace period and you have financed your new purchase at no added cost.
  • Simplify expense reports. By issuing cards to your employees for their reimbursable expenses, you can cut down on time filling out and checking expense reports, and earn reward points in the process.
  • Review statements. Most business credit cards produce a statement at the end of the year detailing how much you spent on different categories. Review this statement, as it is a good snapshot of your business expenses.
  • Link your account. Link your business credit card account to your accounting software, which will save your finance personnel time. Check out our accounting software best picks to find programs that will automatically account for your card purchases.
  • Get the lowest price. If your card has price protection, save your receipts and get the difference in price if it drops after you buy a product.
  • Achieve elite status. Some co-branded cards automatically qualify you for elite status, while others accelerate the process so you can get upgrades and discounts sooner.

Adam Morehouse contributed to this article.

author image
Jennifer Dublino, Senior Writer & Expert on Business Operations
Jennifer Dublino is an experienced entrepreneur and astute marketing strategist. With over three decades of industry experience, she has been a guiding force for many businesses, offering invaluable expertise in market research, strategic planning, budget allocation, lead generation and beyond. Earlier in her career, Dublino established, nurtured and successfully sold her own marketing firm. Dublino, who has a bachelor's degree in business administration and an MBA in marketing and finance, also served as the chief operating officer of the Scent Marketing Institute, showcasing her ability to navigate diverse sectors within the marketing landscape. Over the years, Dublino has amassed a comprehensive understanding of business operations across a wide array of areas, ranging from credit card processing to compensation management. Her insights and expertise have earned her recognition, with her contributions quoted in reputable publications such as Reuters, Adweek, AdAge and others.
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