Six Myths About Business Credit Cards

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    Business owners have to be liquid in their finances to sustain healthy business operations. As the need for cash flow is crucial, those with trouble may opt to look for the best options for funding — business credit cards are one of the leading ones.

    However, some business owners feel hesitant to use credit cards because of the common misconceptions about them.


    6 Myths About Business Credit Cards

    Here are the 6 common myths surrounding business credit cards:

    1. Business Credit Cards Require An EIN

    A business credit card can be issued for sole proprietorships, limited liability companies, corporations, and many other business entities. The issuer does not need to know the business owner's tax identification number.

    Some business credit cards may ask for the social security number of the business owners, but this is only for tax purposes. The issuer can look up business owners' tax IDs through their social security numbers — they do not need to have the same numbers.

    2. Employee Cards Are Costly

    Most credit card issuers grant adding employees to the same account. However, some people believe that doing this can be expensive for the company.

    But, employee cards do not add more to the cost of credit card management. Usually, each employee card is assessed a small fee to manage data, such as salary, billing address, and other additional information. The cost is typically around $25 a month, with some credit card providers even offering the service for free.

    3. Business Credit Cards Need Excellent Credit

    Business credit cards are not like the credit cards that individuals need to apply for. For this type of card, the issuer has to know the financial stability of the business, not the business owners. As long as the company can meet its payables and payroll, it is qualified to apply for a business credit card.

    Additionally, some companies offer a secured business credit card. As the name suggests, these cards require a deposit to be placed as collateral before you can activate them. The deposit serves as a security measure for the issuer to ensure that the company can pay for its purchases.

    4. Using A Personal Credit Card For Business Purchases Is Okay

    Business owners sometimes transfer their business-related expenses to their personal credit cards. Once this happens, business owners would have trouble separating the business-related expenses from their personal expenses to file for their taxes.

    Expenses are tax-deductible, and keeping track of them at the end of the year is crucial.

    Business credit cards are recommended for business owners to help them easily track their expenses. Starting a business credit card is easy, and this is the way for owners to keep their expenses organized.

    5. Personal Credit Cards Offer More Attractive Rewards

    Business credit cards are a good way to earn rewards points that can be used to offset business expenses. In fact, some business credit cards may offer additional perks, like discounts, travel rewards, cashback, and exclusive access to events that can be a good bonus for employees.

    They can also offer large reward points when purchases are made for company essentials. Smaller companies may also opt to apply for a small business credit card, so even if they do not have big budgets, they can still get good perks.

    6. No Pre-set Spending Limit Credit Cards Have Limits

    Some people believe that with no pre-set spending limit, credit cards have no actual limits. This is not the case. Business credit cards are still under the same credit card legislation as those for individuals. Credit card issuers will only issue credit cards with a maximum credit limit to business owners who can manage their business expenses.

    Different credit cards have different spending limits, depending on the credit score of the business owners, the company's cash flow, and other factors. Business owners who are cautious with their finances may opt to get a credit card with a spending limit to help them stay in control of their business expenses.

    What A Business Credit Card Is And How It Works 

    A business credit card is just like an individual credit card that can be used for business purchases and to make payments. This is a payment method linked to a credit line used by people and businesses. Business credit cards are used for online shopping, online purchases, and for paying for other business-related expenses. As is the case with all credit cards, they must be paid off responsibly, and the business that is using the card has to pay its bills promptly to protect its credit score.

    Get A Business Credit Card Today!

    Business credit cards are great tools to help keep businesses organized and running smoothly. They are easy to open and easy to use and have special perks.

    But before you go out and get a business credit card, do the proper research. Check out this guide on how businesses can accept credit card payments to learn more about how they work.