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Tips for Using Business Credit Cards Responsibly

There are several benefits of business credit cards for small business owners, but there are also a few potential problems. In order to maintain a decent business credit score, it’s vital that entrepreneurs learn how to use these tools responsibly.

Here are four ways entrepreneurs can make the most of business credit cards without making common mistakes:

1. Choose business credit cards wisely.

Pay attention to all of the fine print details when comparing business credit cards, from interest rates and other fees to grace periods and perks, in order to choose the best credit card for your particular business.

A good option is often to check with the bank where you have your business checking account as there’s already direct access to customer service people and the business might already have a reputation with the bank. If you have a good history with them, you might be able to get better credit card terms than you could with another issuer.

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2. Avoid using business credit cards as startup capital.

Many businesses can take a couple of years to turn around a decent profit. Because of this, it’s rarely smart to finance the full startup costs of a new business with credit cards. You might not earn enough to pay off the debt and incur high interest costs or penalties. Some entrepreneurs are even put out of business because of the inability to pay off the startup debt they ran up through these credit cards and related loans.

3. Don’t use business credit cards for all purchases.

It can be a good idea to reserve business credit cards for large one-time expenses, or things such as business networking and entertainment (when meeting with clients for example). Using business credit cards for routine smaller expenses (such as office supplies) can add up to big debt if not paid off right away.

An exception to this is if you don’t use your card to finance these purchases and instead pay them off immediately for the sake of earning rewards. No matter what you’re buying though, it’s always a good idea to pay off business credit card balances as soon as possible to avoid being hit with heavy interest or late charges.

4. Manage employee spending.

Business credit cards for employees will allow a business owner to monitor employee spending on business expenses while keeping automatic financial records. This can allow you to save money by keeping a closer eye on actual costs of employee expenses, without simply relying on an employee to keep their own records and make smart choices. Employee cards on your business account should be limited to responsible parties who need to make routine purchases on your company’s behalf.

Do you use business credit cards? How do they benefit you the most, and what are your biggest concerns with them? How did you decide which card was right for your business needs? Share your thoughts and experiences in the comments.

Note: This article was originally featured on April 13, 2007. It was revised and updated on its currently-listed publication date.


  1. Hayden

    What if I got myself a business credit card and I messed up my credit rating, do I get still get good benefits when applying for new business credit cards. Probably a common question but nobody seems to be asking.

  2. Jennifer Mattern

    That depends on a few things. If you mess up your personal credit rating, it can affect your rates and credit offers for your business, but it would depend on what kind of legal business form you run. It would be different if you’re running a corporation as opposed to simply a sole proprietorship. Rules can also depend on the state that you live in.

    If you’re asking whether you’d still get good rates if you mess up your credit rating using specifically a business credit card, it’s very possible that you won’t. Your business has a credit history just as you do personally. If you damage your business credit history, you can get higher interest rates, or be turned down for business credit cards, loans, credit with vendors, etc. in the future.

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