Managing your business Growing your business / Resources

What Are the Lesser-Known Ways Credit Cards Can Help My Small Business?

By: David Halverson September 6, 2022

Credit cards can sometimes get a bad rap. Although there are certainly drawbacks to using credit cards that you should be aware of – most notably, high interest rates and annual fees – there are also a host of features and benefits that you can use to help your small business. Some of these are well-known and have been written about extensively. For instance, you likely already know that most small business credit cards offer generous sign-up bonuses and bonus points for spending in certain categories. But beyond those headline features, there are plenty of benefits that you can derive from prudent use of your cards. Here are some of the most important lesser known ways credit cards can help small businesses.

Track Employee Expenses

Most small business cards allow you to issue individual cards for separate employees. When these employees make charges on the master account, they are segregated by name. This allows you to track exactly what each employee is spending. Rather than having to reconcile employee spending at the end of the month or quarter, you can keep real-time tabs on how much your employees are spending, and on what. This information is also usually summarized in a year-end report, which can make annual bookkeeping easier.

Short-Term Financing

While some business credit cards offer a limited window in which you can make 0% purchases or balance transfers, you can actually use credit cards as a method of short-term financing indefinitely. Purchases you make on a business credit card won't typically become due for 20-30 days after your statement is issued, and the statement itself might not come out for weeks after you make your purchases. In other words, you might have 45 days or more before you have to pay for the things you buy, and you won’t pay a dime in interest along the way.

Ancillary Travel and Purchase Benefits

For some businesses, the best features of a small business card come in the form of protections and ancillary benefits, such as those offered by the Chase Ink Business Cash Card. Some of the most important include:

  • Purchase protection: Allows you to get a refund if products are defective or stolen within a specified time, such as 60 or 90 days
  • Cell phone insurance: Provides coverage for lost or damaged cell phones, often up to $600 or more
  • Auto rental insurance: In some cases, cards will provide primary car insurance for any rentals made using the card, meaning you won’t have to deal with your general business or personal car insurance for any claims
  • Extended warranties: Some cards will double the original manufacturer’s warranty on purchases, or at least add on additional time
  • Trip cancellation insurance: If a trip for you or your employee gets canceled, you can get 75% to 100% of the cost reimbursed to your card.
  • Trip interruption insurance: This insurance provides payback for extra expenses you may incur due to an interruption in your trip, such as additional hotel or transportation costs
  • Lost baggage protection: Most cards offer a few hundred dollars for lost baggage costs
  • No foreign transaction fees: This can save you 2% to 5% on all the foreign transactions you and your employees make. This also applies to purchases made on foreign websites. 
  • Additional perks: Some cards offer additional benefits such as a Boingo wifi plan

Easy Account Management

Small business credit cards are specifically designed to make account management easy. Since business credit card transactions can be much more frequent and complicated than with personal credit cards, an account management system is critical. Most small business cards allow you to download transactions directly into Excel, Quickbooks or other business management software so that you don’t have to physically track them all on your own. If nothing else, this can save your accountant hours of work trying to organize all your transactions, and that can result in savings of hundreds of even thousands of dollars for your business.

Keeping Personal Finances Separate

Regardless of the size of your company, it’s important to keep your personal and business finances separate. For starters, you might be exposing yourself to personal liability if you mix your business dealings with your personal finances. By keeping your business finances separate, if your company has financial difficulty, creditors can’t generally pursue you personally, although you should consult a legal advisor. Second, it makes it much easier to do your books and understand your cash flow and profit and loss if your business finances aren’t muddied up with personal income and expenses.

The Bottom Line

Small business credit cards offer a wide range of benefits, but many companies simply overlook some of the best features. Beyond the big sign-up bonuses and the points and rewards that you can earn with a card like the Delta SkyMiles Platinum Business American Express Card, business credit cards offer real-world assistance to help your company operate more smoothly. Most of these features involve no extra cost or effort on your part, unlike sign-up bonuses – which require a minimum amount of spending – and bonus points categories, which require you to spend on certain types of items. So, while you can take into account the headline features of most cards when researching which might be a good fit for your business, don’t overlook the secondary benefits that these cards can offer.

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