For business owners new and old, having a credit card specifically for your business has a myriad of benefits. It allows you to pay off larger purchases over a longer period of time, it’s great in case of emergencies, and it gives you the opportunity to quickly build your credit score as a business owner.
However, there are many myths associated with business credit cards that have caused some confusion and misinformation over the years. If you are in the market for a business credit card, or simply looking to dispel any questions you have, here are a few myths that are worth debunking:
1. Business Credit Cards Have Lackluster Rewards
For some reason, many people these days are under the impression that the rewards offered through business credit cards pale in comparison to those offered through personal credit cards. This is a common misconception. In fact, most business credit cards have better rewards programs and perks than personal credit cards.
Depending on what your needs are, you can easily find a credit card company that will offer certain perks specifically tailored to you and your business. There are countless options out there to choose from. Make sure you spend some time researching and compare credit cards to ensure a good fit for your business.
2. Only Big Companies Need Business Credit Cards
Business owners also seem to be under the impression that only large companies need a business credit card. This is untrue. Businesses of all shapes and sizes can benefit from having a card to charge expenses to and use to establish better credit. It’s just about finding a credit card company that’s going to best serve your needs.
Since no business is exactly the same, no business credit card will be the same. But, regardless of which credit card company you end up going with, make sure you pay off the balance as quickly as possible and keep all of your personal expenses separate.
3. Personal Credit Doesn’t Affect Business Credit
Possibly the biggest misconception that exists is that your business credit score doesn’t affect your personal credit score. Unfortunately, this isn’t true. And although in the long run your business and personal credit scores will exist separately, there is a bit of overlap in the beginning.
More often than not, people don’t have existing business credit when applying for their initial loans. This means that credit card companies have to look at your personal credit score to decide your spending limit. If your credit is solid, this can work in your favor. However, this can also be a deterrent if your credit isn’t the best.
As you can see, even if your company is new to the marketplace, having a business credit card can make your life easier. There are of course different options to weigh, but ultimately, doing your research and choosing the right card will help take your business to the next level.
