Have you ever wondered when it's time to get a business credit card? Do you think you should open a business bank account? If you are an entrepreneur, you should definitely check out this guide and learn everything to learn everything about Business Credit Cards!
If you are an entrepreneur or own a small business, you probably are wondering when it's the perfect moment to open a business bank account and get Business Credit Cards. So, here's an extensive guide that will help you understand timings and detail what type of credit card you need for your business. Let's check it out!
1. Identify when it's time to get a business account
Every entrepreneur or new business owner wonders when is the right time to open a bank account for their business. It will happen eventually, but how exactly do you know it is time to open a bank account for your business? Here are some facts that will help you identify when is the perfect time!
It's time to open a bank account for your business
- When it has too many transactions
When you are taking the first steps in a business, it's more likely to run it through your personal bank account. However, when the business starts to grow and the number of transactions boosts, you will notice that you will need a specific bank account for it.
Once you have a separate bank account for your business you will be able to manage it easily.
- To improve your business' image
If you want to build a powerful image for your business, then you should avoid writing checks out of your personal account! It looks unprofessional and won't help build confidence with your suppliers, your employees and your clients.
If your business has a special account, then its name will appear on checks and other transactions. In addition, it will strengthen your brand and will show you are open for business.
- To protect your identity
If you use your personal bank account for your business you will be more vulnerable to potential issues like fraudulent activity or identity theft. If your business has its own bank account you can limit the damage.
- To build a business banking relationship
Having a business relationship with your bank is important. It can help you negotiate benefits for your business, like providing credit cards for your employees and partners, and can even let you obtain bank financing when needed.
- To accept credit card payments
If your business counts with its bank account, you can accept credit card payments at your store. This isn't possible through a personal bank account. Accepting credit card payments at your business can improve your relationship with your clients, so you should seriously consider having a commercial account.
- To sell your business
If you are thinking about selling your business, then you should definitely open a bank account for it. This way, once you sell it, the bank account will transfer to the new owners. Besides, by having a bank account for your business you will have easy access to its financial history and other documents you will need in order to sell it.
2. Why you should have a Business Credit Card?
The main idea behind having a Business Credit Card is to separate your personal expenses from those related to your work. There are many reasons to do so, but it’s mainly because it’s an easy way to stay organized. Streamlining your finances will also come in handy when preparing your taxes. It can also help you reduce your tax bill!
Whether you’re a business owner or a freelancer, if you work in a big company or a small one, there’s a Business Credit Card that fits your needs and is waiting for you. In each of these positions, you’ll need specific features in your future card to complement your work style. Find out which rewards and perks are the most useful for you!
You’ll find that the most common offers are welcome bonuses, cashback rewards, and points related to travel expenses. The first ones are usually a sum of money that you’ll be given as a bonus if you reach a certain spending amount within the first months after your card purchase. The other two rewards are more related to products and services whose price will be lower. Keep in mind that you don’t need to pay taxes on these credit card rewards!
If you don’t travel much at work, you won't receive many benefits from airline miles and hotel points. In this case, having a card that offers big rewards in these forms won’t probably be used to its full potential. You should look for cards that include car coverage if you use this vehicle a lot, but you should focus your search on other aspects if that’s not your case.
Many businesses have constant spending patterns. In other words, they usually spend their money on the same items and services each month. This should point your search for a Business Credit Card in the direction of those that offer high cash back earnings in the categories where you usually make the biggest purchases.
Likewise, there are also cases where spending patterns are more irregular. There are Business Credit Cards that offer bonus cash back on different purchases, which you can usually choose and switch monthly. This might suit you the best, as you’d be able to make your purchases each month based on the category where you have the highest cashback returns.
3. Best Business Credit Cards
You can find many Business Credit Cards available to freelancers or business owners with rewards like cash back. Here are four of the best ones that you should definitely consider if you’re looking for one.
A) American Express: Blue Business Cash Card
This card has a 0% annual fee and simple terms. You can earn 2% cashback on all your purchases, which is very useful if your purchases aren’t limited to one category. However, this cashback is lowered to 1% after you hit a threshold that consists of $50,000 a year.
There’s no welcome bonus, but this company makes it up with an interesting addition: a benefit called Amex Offers, reserved only to the company’s cardholders. Because of a partnership with popular travel merchants, retailers, insurance companies, and utility companies, you’ll get cashback and statement-credit offers at them thanks to Amex Offers.
B) Bank Of America: Business Advantage Cash Rewards Mastercard
You’ll also find a 0% annual fee with this card, although the way its cashback rewards work is more complicated. There are three categories with different benefits. The first one gives you 2% cash back on dining, while the second one lets you earn 3% cashback on a field of your choice (within their given options), which you can switch each month. This bonus is limited to the first $50,000 every calendar year and covers all combined purchases. Lastly, you’ll earn 1% cashback on all other purchases.
There’s a welcome bonus of $300 statement credit if you manage to spend $30,000 before 90 days pass after you’ve opened your card account. In addition to this, you’ll receive 75% more cashback if you’re a preferred Business Platinum Honors member in this company’s Preferred Rewards program.
C) Chase: Ink Business Cash
There’s no annual fee on this card either. You’ll also find different cashback rewards in different purchases: there’s 5% cashback for what you’ll buy in an office supply store, and on Internet, cable, and phone services; you’ll get 2% back on purchases at restaurants and gas stations; there’s 1% cash back on the other fields. Keep in mind that the first two rewards have a threshold of $25,000 each, which covers all combined categories.
You can choose between several redemption options, which include merchandise, gift card statement credits, and travel-related services and products. The last option is only available if you pair up this card with another one that offers Ultimate Rewards. There’s also the profitable possibility to earn a hefty welcome bonus with a relatively low spending amount. If you spend $3,000 with this card before three months go by after you first got it, you can earn $500 in bonus cash back! Compared to other bonuses on this list, there’s the same time limit for a bigger reward, which is obtained with less money.