If you have a hard time managing your money, a business credit card may just be an excuse for you to go into debt. It is fairly simple to get a business credit card with a low starting limit, even if your personal credit history is not in great shape. With that in mind, you can quickly destroy your business credit and hurt your chances of securing funds in the future if you do not keep up with your payments on your business card.
In many cases, a business credit card simply isn’t necessary. For instance, if you rarely have expenses for your business, you may not need more than your personal line of credit allows. You can still note which expenses are for the business, but you don’t have to have a whole card for that. If you don’t have any other people spending your money, all you really have to do is organize your own transactions.
If you run a business with your spouse, you could get a personal credit card and add her to it. This means that your credit score will be impacted by your business actions, but most self-employed people experience that anyway. You can have a separate card for the business that isn’t technically a business credit card. Only spend money on it when you need to buy something for the business, and you’ll be set.
Getting a business credit card comes down to personal needs. Do you have enough business expenses to justify a whole new card? Do you want to build credit for the business outside of your own credit? Do you have employees that you need to provide money for? The answers to these questions will determine if you do in fact need one of these cards.
If you decide to get a business credit card, make sure you compare your options so you get the right card from the start. Assess the annual fee, transaction fees, APR, credit line, and other expenses associated with the card to get something you can actually use. If you need to extend your credit line in the future, you can request to do so after about 6 months of continual use and on-time payments. Keep track of your debt, and use your new money wisely.