This article contains general information and is not intended to provide information that is specific to American Express, or its products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
For some entrepreneurs, small business credit cards can offer flexible financing solutions. Business owners who ordinarily use their bank account alone to cover expenses may wonder if there are benefits to a business credit card — and there could be, including the ability to help:
Separate their personal and business finances
Oversee employee purchases
Create some cash-flow breathing room
Build their business credit score
Earn rewards
Here's more about each potential benefit to help owners find the best business credit card for their small business.
Separate Personal and Business Finances
Running a small business can potentially blur the lines between someone’s personal and professional life. But keeping personal and business finances separate could help simplify accounting. For owners who operate under LLCs, partnerships, corporations, or other business structures, mixing personal and business funds could jeopardize protections.
Some business credit cards come with robust tools or apps for tracking and managing spending, which can help simplify the process of overseeing employee purchasing.
Business credit cards for small businesses could make it easier to separate personal and company expenses. For example, an entrepreneur could get the best credit card for small business use, put all business purchases on it, and help keep their expenses well-organized.
Oversee Employee Purchases
Any business owner who has asked an employee to make a business purchase knows that reimbursements can be complicated. Small business credit cards that offer employee cards could help eliminate that hassle.
Once an owner has identified the best credit card for their small business, they can apply for a business credit card for themselves and employee cards for trusted workers. Some business credit cards come with robust tools or apps for tracking and managing spending, which can help simplify the process of overseeing employee purchasing.
Create Some Cash-Flow Breathing Room
Business credit cards could give small business owners some wiggle room to manage cash flow. Small-business owners may use their credit cards to pay invoices, buy supplies, or absorb costs that stem from business emergencies. That can add up to a helpful benefit of a business credit card: access to cost-effective, short-term working capital.
Building Your Businesses Credit Score
Once an owner has a small business credit card, using it regularly and responsibly could help build their business credit score. Good credit practices include keeping the average balance well below the card limit, making payments on time, and paying more than the minimum balance due. When a business improves its credit score, it may affect obtaining financing in the future.
Earning Rewards
Some business credit cards for small businesses may offer rewards programs like cash back, eligible discounts, and points. Cash-back rewards may prove beneficial because they could help reduce the effective cost of business purchases.
While business expenses can earn rewards on a business credit card, those rewards may be able to be redeemed for personal use — like a much-needed getaway. Businesses may also redeem points to offset the costs of everyday purchases like office supplies or to motivate staff.
Guard Against Fraud
Fraud can be an unfortunate risk for businesses of all sizes. When a small business loses cash due to fraud, the business owner may be limited in what they can do to recover their losses. With small business credit cards, however, a business owner could monitor their account online for suspicious charges — some business credit cards also offer alerts for irregular spending — and contact their card issuer in case of fraud.
When trying to decide on the best business credit card for a small business, a business owner may want to review each issuer’s fraud protection policies.
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