Does Your Small Business Need a Credit Card?

In America, literally hundreds of thousands of small businesses are started each year. Up until the last 10 years or so, most credit card companies didn't really market their services to these small businesses. It was only with the economic boom of the late 90's that credit card issuers took notice of the success of many small businesses and began going after this market segment.

I've heard many folks say that you really don't need a separate credit card for a small business, especially if it is just yourself running it with no employees. They say to simply use your own personal credit card when you need to make any purchases. So, why would you need a small business credit card?

The biggest reasons you need a separate credit card in your small business is for bookkeeping and taxes. Having one credit card for business purposes only will make tracking expenses so much easier. When you go to file your taxes you'll have your statements to make things quick and simple for your accountant.

Another good reason to have a credit card for your small business is for your employees. If you have employees, it makes things easier when they can purchase business items when you're not there.

A small business credit card can also help your company's credit and build up its own credit history. And, it can also provide bonuses through its use with various rewards programs that are offered by credit card companies.

How do you pick the right small business credit card?

This is where things can often get a little trickier. There are just a ton of choices on the market, but by answering some basic questions about your business you can make the right choice quickly.

Will you be paying off the balance each month? If no, then you'll want to look for a credit card with the lowest possible interest rate.

Of course, it goes without saying that you want to look at any fees that might be associated with a new credit card. Sure, the fees will most likely be tax deductible, but it's still money coming out of your small business nonetheless.