5 tricks to leverage business credit cards for growth

business credit cards closeup

Using business credit cards for more than purchases

Business credit cards are not dangerous unless you use them incorrectly. They’re meant to be vital tools for growing your business while also providing a cushion during tough economic times. 

With the right cards you can improve your budget strategy, bridge cash flow gaps and build credit for better financing opportunities. You can even use reward cards to boost morale.

We’re going to tell you exactly how to leverage business credit cards for your advantage.

Build business credit and get financing

According to the National Small Business Association, 27% of businesses surveyed said that they had difficulty finding funding. Bank loans and lines of credit are the most popular types of funding that small businesses apply for (87%), followed by credit cards at a distant second (27%). 

business credit cards closeup

Business credit cards are one of the most flexible types of business financing. However, you may be in need of other types of funding, depending on your future plans and where your business currently sits.

Unlike a loan, applying for a business credit card does not require your business to have been operational for a certain number of years. Most credit issuers make decisions based on your personal credit score and available income.

It’s possible to get a business credit card within the first 30 days of filing as a legitimate business, which is something people can do to kickstart your new business in good financial shape.

Another area that startups and small businesses have trouble in is separating personal and business finances to keep the business in good financial health. 46% of all small businesses use personal credit to make purchases, but business owners can easily avoid this trap. 

With business credit, you minimize the needs and risks associated with using collateral and personal savings. There are many lenders that will only look at business credit as a qualifier, so a bumpy personal credit history isn’t necessarily a deal-breaker. 

As you upgrade your business credit cards for better rates, limits, rewards, etcetera, you may also find credit card companies that no longer review personal credit history and only review your business credit profile.

Fortunately, business credit cards help companies build credit fast because they report monthly on-time payments to Dun And Bradstreet, Experian Business and Equifax Small Business.

Managing payments and accounting systems

Business credit cards can offer ways to track and manage expenses, such as integrating with accounting systems like QuickBooks and NetSuite. Some even offer statement credits toward these programs. Even without these added features, business credit cards can help categorize purchases and turn budgeting into a breeze.

By organizing your spending habits and minimizing the different methods you use to make purchases, you’ll also make things much easier for yourself at tax time. If you don’t separate your purchases, you’ll need a full-time bookkeeper on top of balancing debits and credits with every transaction.    

Keeping things on your business cards will provide a backup record of your purchase history. However, you’ll probably still want someone internally to manage the integrity of the purchases by auditing itemized receipts if you really want to find ways to cut costs. 

There are some credit card apps that simplify this process by allowing users to upload a photo of their receipt with notes. This can free up a significant amount of time to focus on more important tasks (such as growing the business).   

Bridging the cash flow gap

Businesses need to pay vendors and suppliers at particular times, and that timing can often leave a budget stretched for cash. Charge cards, however, can be a good way around this issue. They can give companies more control over the timing of when the bill comes due.

Charge cards are different from credit cards and are meant to be used for this reason. They require you to pay the full balance each month and often don’t have limits. There are usually service fees in lieu of interest, but charge cards provide an opportunity to gain some float because they allow businesses to pay bills when it’s most practical.

Charge cards also allow you to pay loans more strategically and avoid minimum payments if a due date lands on an inconvenient time for expenses. You can cover the payment using a charge card (or make a bigger payment to reduce interest) and pay the balance on their charge card later using your accounts receivable.

Earning rewards for your business

New and veteran businesses alike can use rewards cards with the ability to earn points, get cash back and enjoy other bonuses.

Some cards offer flat rate cash back on all purchases while others have different rates for various business-related spending categories. Categories typically include advertising firms, hotels, gas stations, food and software, so the rewards are ideal for literally any industry. 

using business credit card online

Categories and rates are usually pre-set when you open the account. For example, a card may offer 5% cash back on airlines, 2% cash back on office supplies and 1% on all other purchases. Sometimes cards offer categories that are selected automatically according to your personalized shopping habits.

All business credit cards provide apps for tracking your rewards. With practice, you’ll pick up on finding ways to utilize rewards strategically. You may occasionally find points to be more valuable than cash back on certain things, but this is something you’ll want to carefully analyze when you open a new account.

In some cases, you can earn a decent amount of cash back for your business. You might otherwise opt to trade in cash back for rewards points to spend on travel, especially if you have employees that fly regularly (based on the terms and list of rewards and partners).

Many organizations find it beneficial to exchange points for gift cards to use as employee incentive and improving morale. 

Business credit is the key to success

Excellent business credit doesn’t happen naturally overnight. We give you direct access to the vendor, fleet, cash and credit cards most relevant to your business so you can build credit simply by managing your day-to-day expenses. Contact us today.

FREE Business Credit & Loan Consultation

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Let’s define your goals and establish a path using the most practical resources available to you.


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