Whether you have been running a business for a few years or simply began a start-up, you will have thought of getting business credit cards. Credit cards for your corporation might be an ideal approach to ensure your employees have access to funds once they need them.
around 67% of firms are already having fun with the benefits of a corporate credit card, and that number is growing with more favorable terms offered by credit card firms. Capital on tap is a fast-growing business loan provider, providing small and medium-sized businesses with access to capital.
The benefits of business credit cards transcend mere flexible access to credit. Credit cards also offer opportunities to extend your credit rating, rewards, payment protection and more.
In this text, we are going to discuss the primary the explanation why you must provide your employees with corporate credit cards.
What’s a business credit card?
A business credit card is a useful tool for almost every business. Business credit cards might be similar to private credit cards in that they permit users to access credit as much as an agreed limit. Business credit cards may carry higher rates of interest than personal credit cards, although you’ll be able to get other benefits with them.
Why should you might have a business credit card?
Business credit cards might be very helpful in allowing you and your employees to access funds when needed. This might be essential during times of low money flow or when it is just more convenient to make use of a credit card than to handle money payments. Our top five benefits for work credit cards include the next.
1. Separate business and private expenses
Having a credit card for business purposes is an ideal approach to separate your various expenses and value centers. This makes it easier for you and your employees to maintain track of how much they’ve spent on work-related items in comparison with their very own personal expenses and even different areas of activity. It is also convenient because you will not must reimburse employees for the cash they spend on business. This will save time and eliminate the necessity for additional documentation.
2. Money flow tracking
Using a credit card may help keep all of your bills and expense information in a single place. This makes it much easier to maintain track of what you are spending and on. Having all this information in a single place makes it rather more convenient to regulate your funds in addition to note changes in your spending. This implies you’ll be able to easily see in case your expenses suddenly increase.
“It is important to maintain track of where your money goes, especially for those who use a couple of credit card. Modern credit cards offer a wide selection of expense management tools that let you see at a look the differing types of expenses your corporation spends. This makes it easy to see where cuts might be made or where more budget must be allocated.”
– Damian Brychcy, COO and American managing director of Capital On Tap
3. Constructing credit for the corporate
Like individuals, firms should strive to construct their very own (*5*)loan(*5*) rating. Your organization’s credit rating shows how well your organization is paying off its debts. Increasing your organization’s credit rating will make lenders more prone to offer more lines of credit at lower rates of interest or lower fees. The use of credit cards by employees and the immediate payment of the balance will improve the credit rating of your organization. It is crucial how nearly half of consumers feel their credit rating is simply too low and doesn’t reflect their credit habits.
4. Cashback and other benefits
There may be a big selection of benefits that credit card firms offer to draw or retain customers. Cashback, airline miles and various loyalty points rewards can profit your corporation by providing you with something back each time your corporation must make a purchase order. For those who have already got to spend that cash on some item for your corporation, it’s price getting whatever perks you’ll be able to.
5. Purchase Protection
Credit cards often offer a lot better terms payment protection in comparison with other payment methods. This may help if, for example, it’s essential book flights to go to a possible customer, however the flight is cancelled. Having payment protection in place may help protect your corporation from a financial blow if something goes improper.
Other Benefits of Corporate Credit Cards for Employees
There are other reasons to present corporate credit cards to your employees, comparable to:
- You’ll find higher rates of interest and deals than some business loans
- Some cards can routinely categorize payments so you’ll be able to see where your organization’s money goes
- Getting a business credit card might be easier in comparison with a business loan
- It could be a versatile payment option that’s accepted almost in every single place
- There are sometimes easy options to scale back worker expenses if the necessity arises
- This might be more convenient for your employees than having to hold money.
How do I ensure my employees use their credit cards appropriately?
For those who’re apprehensive about how your employees might use corporate credit cards, this is not an unusual problem. Nevertheless, you’ll be able to easily establish rules together with your employees about once they can and can’t use the cards. Some corporate credit cards also let you place limits on how much you’ll be able to spend in a single interaction, which might assist you avoid large, accidental overdrafts.
Is it hard to get a business credit card?
No, getting a business credit card will not be difficult. In truth, it might be easier to get a credit card than a business loan. Nevertheless, some credit card firms could have criteria that should be considered before they consider your credit card application. For instance, it’s possible you’ll must have a certain length of trading history or meet a minimum amount of monthly income.
Is it higher to present employees credit or debit cards?
The everyday approach of firms is to present employees credit cards for any work-related expenses they might must cover. This is frequently because credit cards have higher payment protection than debit cards. Credit cards are also more prone to offer benefits comparable to cashback, airline miles or points.
“Debit cards, reimbursement or small money aren’t any longer a approach to spend business. With credit cards, businesses can spread their expenses and gain capital that they might not give you the option to acquire with bank loans. Combined with the safety aspect, credit cards are a useful tool for firms and employees.”
– David Luck, co-founder and CEO of Capital on Tap
Business credit cards for employees: a summary
For those who run a business, providing employees with credit cards might be extremely helpful. Using credit cards can assist you keep your corporation payments in a single place and may make it easier to trace your expenses. If you use a business credit card, you can too make the most of payment and rewards protection, plus you should utilize this card to begin constructing your corporation’s credit rating, making it more eligible for future loans or lines of credit on attractive terms.