What Is a Business Credit Card and How Does It Work?
Business credit cards assist in managing cash flow and building business credit. They function similarly to personal credit cards: you charge expenses, pay down the balance, and continue using the card. Most business credit cards have a fixed credit limit and require a minimum monthly payment. It is recommended to pay the balance in full each month to avoid interest charges, which typically range between 18% and 28% APR.
Business charge cards differ by having no preset credit limit but require full payment each month. These are ideal for businesses with strong cash flow aiming to maximize rewards.
Benefits of Using a Business Credit Card
- Earn rewards such as cash back or travel points on every dollar spent, usable for personal or business purposes.
- Access discounts on business-related expenses from brands like Adobe, Dell, Lyft, and Apple.
- Receive statement credits for travel expenses including flights and checked bags with many business travel cards.
- Benefit from higher credit limits, with some cards starting at $10,000.
- Enjoy bigger sign-up bonuses compared to personal credit cards.
- Obtain free employee cards to help manage company spending.
- Utilize spending controls to monitor and limit employee expenditures.
"Business credit cards help manage cash flow and build business credit. They earn rewards on business expenses and offer free employee cards and spending controls."
Overall, business credit cards provide practical rewards and financial management tools tailored to the needs of companies.
Author's Summary
Business credit cards offer rewards, discounts, and spending controls while helping businesses build credit and efficiently manage expenses.