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Business Credit Cards 01 The main points you should know about business credit cards. Key Points
What are Business Credit Cards?
Have a brief knowledge about the business credit cards.
Business Credit Cards vs. Personal Credit Cards
Know how a business credit cards differ from personal credit cards.
Business Credit Cards vs. Corporate Credit Cards
Know how a business credit cards differ from corporate credit cards.
Choosing the Best Business Credit Cards
Guidelines on finding the best business credit card.
Business Credit Cards 02 The main points you should know about business credit cards.
Advantages of Business Credit Cards
List of what business credit cards can do for you.
How to Use Business Credit Cards?
Helpful guidelines on using business credit cards wisely.
What are Business Credit Cards? 03 Have a brief knowledge about the business credit cards. Business credit cards have advantages for business owners such as tax deductions on spending and prestige benefits only available for those with an ABN (Australian Business Number). Business credit cards work on the same principle as personal credit cards, allowing the cardholder to purchase goods or services physically at a merchant location, or remotely over the telephone or via the Internet. Once a company is established, though, there are great benefits in switching to a business credit card, for which you will need an Australian Business Number. You can apply for one of these online from the appropriate government website.
Business Credit Cards vs. Personal Credit Cards 04
Business credit cards are issued to the company not to an individual.
These cards may have restrictions on them. They can only be used for certain purchases, or perhaps that cash withdrawals from ATMs are not allowed.
A number of cards can be issued on the account, and the credit limits and restrictions on each one can be geared to the individual employee who has use of it, so that junior employees will not have the spending power of more senior staff.
The cards come with management reporting features such as monthly itemized purchase listings that allow easier tracking of expenditure for budgetary and tax purposes.
Business credit cards may also offer complimentary features such as general and business-specific insurances, and banking discounts
Business Credit Cards vs. Corporate Credit Cards 05 Corporate Credit Cards Corporate credit cards are designed for larger firms and corporations, and the features of these cards can be tailored to meet the needs of the specific business. This will involve the business owner and executive staff having a face-to-face meeting with a representative of the card provider to hammer out the details.
Business Credit Cards vs. Corporate Credit Cards 06 Small Business Credit Cards This is the business credit card you will see advertised,.
Small to medium sized business
Business person working from home.
Applications for a card of this sort are done in the same way as you would apply for a personal credit card. The easiest and fastest way to do this is with an online application.
Choosing the Best Business Credit Cards 07 Guidelines on finding the best business credit card. It is not the best option for your business to trust the credit card company that offers business credit card where you have banked as a personal customer for many years.
Check a reputable credit card comparison website.
Go to your own bank and haggle with them over what they are prepared to offer on their card.
Compare to what you know is being offered on the other cards.
Types of Business Credit Cards 08 Two types of business credit cards. 1. Credit Card This is what you would probably expect a business credit card to be, and it operates as your average personal credit card does. You build up a balance over the month and your statement then requires that you pay off a minimum amount at the end of the month. Whatever you don't pay off is charged at a predetermined rate of interest. This is the better option for businesses that need flexibility due to ebbs and flows in cash reserves, where it may not be financially possible to clear the balance in full each month.
Types of Business Credit Card 09 Two types of business credit cards. 2. Charge Card Essentially, these provide a short-term (monthly) loan to a business on any purchases they load on the card, as they require the full amount to be completely paid off each month to avoid the imposition of hefty fees. These business credit cards are better suited to companies that are financially stable enough to always be able to clear their balance. American Express and Diners Club are the best-known of the charge cards.
Advantages of Business Credit Cards 10 List of what business credit cards can do for you.
Ready source of funding that does not rely on you carrying around large amounts of cash, which is impractical and potentially a security risk.
The opportunity to make instant approved purchases in person, online or over the telephone.
Issuing credit cards is also usually cheaper than writing a cheque.
Business credit cards allow for a separation of personal and business expenses, which makes things far easier for tax purposes and to keep track of business expenditure.
Advantages of Business Credit Cards 11 List of what business credit card can do for you. Continued…
Selected employees can be issued with their own card on the account, empowering them to make necessary business purchases, and to charge other business expenses to the card.
Employee cards can have separate credit limits and controls placed on them, in accordance with the position of the individual within the company.
Business credit cards also serve the hugely important purpose of building up your business credit rating.
How to Use Business Credit Cards? 12 Helpful guidelines on using business credit cards wisely.
Limit how many cards you have
The more cards you have in circulation amongst your staff, the higher the risk of debt building up. Keep the number of cards as low as you can to guard against this.
Use your interest-free period
This is the period in which you are not charged interest from the time the purchase is made until the day the balance is due. If you take advantage of this and then pay your bill off in full, you will have effectively enjoyed an interest-free short-term loan, which is something you can do every month with careful planning.
How to Use Business Credit Cards? 13 Helpful guidelines on using business credit cards wisely. Continued…
Don’t use your business credit card as a debit card
This means that you should not use your card to withdraw cash from ATMs, or for any other transaction that is deemed a cash advance.
Pay on time
The best bet is to pay in full on time to avoid any interest charges. Failing that, at least the minimum payment must be met, and it must reach the card company before the due date or a penalty will be charged.