When to get a business credit card

While the idea of a business credit card may conjure up images of taking potential clients out to swanky meals to discuss the Swiss merger, the truth is that anyone with a job qualifies for these types of credit cards. Business credit cards are a useful way to ensure that personal and business expenses are easily separated, and they can even keep your business afloat in rough economic conditions.

Business credit cards often have much higher limits than personal cards, making purchases for your company much easier. Also, these cards often have perks that can be a boost to your business, such as discounts on business-oriented travel, and purchases at certain office and business supply stores. If you are self-employed, a business credit card helps to lend your work a sense of legitimacy as well, and your personal credit will not be reflected on business transactions.

There are several situations that can determine whether a business card would be a good choice for you. If you are an employee at a small or medium-sized business, who makes purchases for the company on a personal account, and then must wait for reimbursement, you should talk to your employer about obtaining a business credit card. Some credit card issuers even offer special deals for smaller businesses, or obtaining multiple cards for one line of business credit, which you may want to mention to your employer as well.

If you are self-employed or a freelance worker who frequently makes business-related purchases, you may want to obtain a business credit card as an easy means of keeping track of business expenses that can be written off during tax time, and separating these from your personal expenses. These credit-card applications will ask you for your tax ID number, but if you do not have a tax ID number, you can use your social security number instead.

As usual, the standard credit card rules apply to business accounts. You must remember to pay off your minimum balance on time during each billing cycle, in order to establish good credit, and remember that these cards are not to be used for personal expenses.

-Seth Berger