Business Credit Cards

Business Credit Cards

The simple credit card solves a number of problems for a company. Besides providing a simple way to pay for bills as well as being useful as for back-up funds, the card allows a way to not only allow for executive perks but also a way to limit those perks. It can also be used to look at how it is being used, allowing expense reports to be quickly created. Also, unlike a petty cash kitty, it can be easily secured and canceled if it does get stolen. For businesses that have expenses that need to be monitored and allowed for, the card can definitely be an asset.

A business credit card is a different animal than a personal card. For a personal card, you need to simply apply and either get accepted or provide a way to secure it. For a company, the process is a little more challenging as the company needs to show that it actually exists and that it can repay its debts in a timely fashion. While the second is relatively easy, especially if the company is going through the bank it already has an account with, the first can be difficult, especially for new businesses. Usually, all that is required is that the company be able to show that is, in fact, open for commerce, and that can range from incorporation paperwork to its “doing business as” paperwork.

The card usually comes in two basic flavors: Secured and unsecured. A secured card usually has an actual account tied to it and that account must maintain a minimum balance; these cards are far easier to obtain as the issuing company knows that they will be getting the money at some point. Also, for companies attempting to build a credit rating this a great way to start doing so; it allows them to start slow and build the rating over time. Throw in a few short-term loans and the company should have a decent rating in no time. An unsecured card is just one that is not secured; in a way, this is what the company is looking to obtain as it comes with its own advantages and is proof that the company was able to obtain a good credit rating.

The card is most useful to the finance department. Finances can track spending habits and determine if the card needs a higher limit placed on it. They can also determine if the card is being used too often and for real expenses or more frivolous reasons. As the Finances is the one most interested in expense reports they can pull up the information as needed in order to ascertain how the card is being spent, making for some interesting conversations with the person assigned to the particular card.

In short, a business credit card can solve a number of problems, from making expense reports easier to file to placing limits on how much a person or department can spend. A company with a card is going to find doing things far easier and so much simpler.