Maintaining a solid cash flow is crucial when running a business, but this is challenging for startups. In fact, many of them fail due to a lack of money. Hence, startups should pay attention to how they deal with their finances.
Fortunately, many tools are available to help you maximise spending, such as a business credit card which allows you to separate personal expenses from the ones related to your company. Consider the following tips to pick the ideal business credit card for your startup.
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You can’t think of picking the best business credit card unless you familiarise yourself with the concept first.
The more you learn, the easier it will be to make the right decision. The first thing to keep in mind is that business startup credit cards are similar to personal credit cards, but they involve a higher credit limit.
However, you can use them only for business expenses. Generally, they require a personal guarantee which takes the responsibility of repayments if the business doesn’t pay the credit card dues.
You must review your business spending to find a business credit card that best suits your needs. Where do you spend the most money? It may be advertising or travelling, or maybe dining.
If you spend on business purchases like phone services or shipping, the good idea is to get a card that allows you to earn rewards. Suppose your business requires you to be on the road often, a travel card will benefit you the most
If you want to apply for a business credit card, it’s essential to look at your personal credit score. It may seem like the two aren’t related, but some banks may evaluate your creditworthiness depending on your current personal credit standing.
Suppose you have a low score; in that case, it’s wise to boost it before applying for a business credit card, as this will prevent negative report entries. On the contrary, good credit standing allows you to secure flexible payment terms.
Some business credit cards require an annual fee, such as those offering great rewards programs and benefits.
Understandably, you may be tempted to opt for a card that doesn’t charge any fees, but that may not be the best choice for the long term. If you want to get more from the card, paying a couple of bucks yearly is indeed worth it.
Besides rewards, business credit cards can offer additional benefits, like account management tools that allow you to track spending.
They can also provide travel protections, like travel accident or baggage delay insurance. You may also get warranty protection like cell phone insurance and travel benefits, including airport lounge access and hotel upgrades.
Additionally, business credit cards make it easier to track spending via bookkeeping tools and offer exclusive discounts on products you generally use, such as cloud storage.
Getting a business credit card for your startup can make your life easier, providing you with quick access to capital. A card is a valuable resource that can drive business growth, so consider the factors above to make the best financial decision.
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