Tips to maximize the small-business credit cards performance


Your credit card has a part in at least one of your business activities if not all. Credit cards are a vital resource for many company owners, allowing them to pay daily operating costs, cover emergencies, and even finance growth.

Many company owners use many credit cards for various financial needs. A separate credit card for shipping expenses and a third for vacation expenses is a smart strategy to stretch your dollar.

65% of today’s small companies charge all their purchases, from office supplies to technological upgrades to credit cards. It makes perfect sense for a firm to have the proper cards, use them in the correct conditions, and maximize the related incentive schemes.

So, why don’t more companies take full advantage? The intimidating fine print makes finding your way around credit cards difficult. Learn more here.

Choose your business cards wisely to reap rewards

Here’s some good news: the credit card industry is aware of the nuanced nature of corporate credit requirements and applications.

Banks are competing aggressively, so they’re all creating creative ways to differentiate themselves. Consequently, there is a wide variety of cards to choose from, each with its benefits, fees, and interest rates.

Budgeting and quarterly projections help identify the best credit card type for your business’s needs.

You can avoid interest entirely by using a credit card with a 0% APR. No need to take out a loan to cover operational costs provided you can make your monthly payments on time.

Alternatively, cash-back cards are useful for daily spending when looking for ways to save money (and let’s face it, who doesn’t).

Depending on the card, you can earn bonus points for purchasing a handful of office supplies, cell phone service, and other overheads. Companies that invest heavily in digital advertising would be wise to use a credit card that rewards them with major benefits when it comes to advertising.

Small-business owners who use debit cards or credit cards with restricted reward schemes are leaving thousands of dollars on the table. The idea is to determine which loyalty schemes will get you the most useful points for running your company.

8 tips to effectively implement for small business cards

1. Use cash-back credit cards

The basic principle behind cash-back credit cards is that you will get a percentage of your total purchase amount as a cash rebate. This can occur in two ways: either by a flat rate or by expenditure categories.

A flat-rate cash-back credit card, like the Citi Double Cash Card, gives you a certain percentage of your total purchase amount back as cash. In this example, you’ll get 2% cash back from the card, with 1% back on purchases made with the card and an extra 1% back after you’ve paid off your monthly credit card balance.

2. Find business credit cards with fewer fees

One of the easiest ways to reduce your credit bills is to switch to a card with lower fees. For instance, if you’re running a company, you can get financing and incentives with a credit card that doesn’t charge an annual fee.

Similarly, suppose your work necessitates frequent international travel. In that case, you can save money by using a credit card for business which doesn’t charge fees for foreign transactions while making purchases outside the country.

Other perks, like continuous awards and free checked luggage, can be available to regular fliers with the right credit card. Here, read about the best financial plans to lead a debt-free life.

3. Justify per annum fee

It’s tempting to choose cards that provide better rewards. There is often a larger cost associated with such services, however. A good company credit card can be found with a little bit of arithmetic.

The two Capital One credit cards for small businesses are a good illustration of this. The yearly charge for the Capital One Spark Miles for Business is $0 for the first year and then increases to $95.

You can earn limitless 2 miles for every dollar spent with this card from Capital One. Capital One Spark Miles Select for Business offers limitless 1.5 miles for each dollar spent with no yearly charge.

The card that gives you two miles per dollar can seem like the obvious choice on paper, but it all comes down to how much you want to spend on the card annually.

In other words, you need to determine whether your additional mileage earnings are sufficient to cover the membership cost.

4. Increase your benefits

Depending on the bank, regular customers can be eligible for special discounts and perks as part of a loyalty program. One example is additional benefits on business credit cards that meet certain criteria.

Loyalty programs are a terrific way to be rewarded for your business; however, you need to meet certain requirements for active participation.

Review your company’s requirements carefully before deciding on a rewards card. Find out the effective options for optimally spending the accumulated rewards when choosing.

How do you plan to keep note of your incentives so you can make the most of them? The most useful rewards cards make it quick and exciting to collect points and redeem them for useful prizes for your company.

And while you’re looking to increase and maximize your card benefits, it’s important to stay clear of anomalies that can harm your business. Thus, read about the six anomaly detection techniques to safeguard your business.

5. Watch for introductory offers

All kinds of benefits are advertised to entice people to apply for credit cards. While some banks promote 0% interest, others give thousands of points to attract new customers. To know what the deal entails, you should read the small print.

To redeem accumulated miles or points, you often must spend a specified amount within a certain time window. Some deals involve a very little investment, $3,000. Others take much more, $20,000.

Just as unexpectedly, a promotion might be withdrawn. If your company puts thousands of dollars in a float on a credit card, you might be hit with a hefty payment when the promotional period is up, which could be more expensive than the introductory rate.

6. Pay your whole balance on time

The convenience of being able to pay for things with a credit card is not without its drawbacks. Interest payments can quickly eat up any profits made by a company that lets a debt remain from one billing cycle to the next.

Keep this in mind. Imagine you charge $10,000 to a credit card that charges you 15% interest but gives you 1% back in rewards.

This signifies that at the end of the month, you will have earned $100 but will be responsible for paying $125 in interest. You lose monthly money even if you are collecting benefits for holding a balance.

Instead, make it a habit always to pay off your debt in full and on time. In this manner, you’ll avoid accruing any interest charges.

7. Weigh the benefits of bonus categories

A flat rewards rate, such as 2% cash back on all transactions, is offered by certain business rewards cards. Some others provide benefits in tiers, such as 3% on petrol and 5% on everything else.

Those who value ease of use would love a flat-rate rewards card. A credit card with bonus categories can be preferable if your goal is to maximize rewards via smart spending.

8. Monitor your business expenditures regularly

Business owners should always be aware of where their money is going. Online reporting features are a standard feature of most business credit cards, allowing cardholders to keep tabs on their finances whenever and wherever they want to.

These can be useful tools for monitoring your expenditure and gauging whether you successfully stick to your financial plan.

In addition, you can limit the usage of employee cards with most business cards to avoid fraud. The use of company credit cards should only be allowed for purchases that have been pre-approved by management. Keeping a close eye on your money might help you better manage them and simplify tax time.

Benefits of maximizing the use of small- business cards

Increased eligibility for loans

Lenders prefer working with companies with a proven track record of repaying loans on time for small businesses. The biggest perk of a high score is the ease with which a business loan can be obtained.

Negative results, however, might have negative consequences. Lenders will be wary of giving you money if you’ve missed many payments in the past.

No disturbance to personal finances

A good business credit score can let the lender concentrate on the viability of your firm rather than your finances. Consequently, the bank will accept company collateral rather than personal assets as security for loans.

As a result, you won’t have to worry about mixing company and private funds. Business credit reports, not consumer credit reports, will include payments and firm obligations. Your score will be protected even if the firm runs into financial difficulties.

Keep your expenses in control

Commercial charge accounts. Using a corporate credit card can simplify the process of tracking and reporting on your company’s spending.

Small company owners can benefit from business credit cards in several ways, including keeping their professional and personal finances distinct using a single card.

That’s why such accounting benefits that come with credit cards for small businesses cannot be underestimated. The cards make it easy for workers to make purchases and for managers to monitor how much time they spend on business-related expenses.

When making entries and filing taxes, many credit cards provide a detailed accounting of all purchases, broken down into categories like lodging, food, and office supplies. It can be useful if you are the subject of a tax audit.

It’s time to elevate your business to the next level

If you know when to use them, business credit cards can be a convenient way to get cash for your company.

Follow the advice we have provided. You’ll be able to fully use your business credit card, avoid making the most typical credit card blunders, and get access to conveniently available financing.

If you use your credit cards wisely, you can raise your credit score, increase your credit limit, and develop a credit history for your company, all of which will increase your chances of being approved for future funding.