Personal Business Cards » Business Purchases

Small Business Credit Cards in Today’s Recession

admin — Sun, 18 Oct 2009 11:45:21 +0000

Today’s recession has had an impact on personal and business credit cards. Over the past 1-2 years many any people are receiving letters from their credit card lenders informing them of an increase in interest rates or a decrease in the credit limit.

Small business credit cards can be an additional source of financial income. They also help in keeping other lines of credit open. Using this type of credit card can ensure that suppliers are paid on time while giving the business an interest-free period (float) in order to obtain enough money to pay off the credit card debt. As the recession has begun to deepen, businesses have found that obtaining credit cards for their business has become much more difficult.

The worst thing a new business owner can do is to use their own personal credit card to finance their business purchases. This makes it very difficult to separate business and personal finances, but also makes the individual responsible for the debt of the business. Not a good thing!

Some businesses are using business even credit cards to pay their tax bill, which is tempting as it avoids any fines for late payment. There is however a fee for doing so. Usually, this fee is significantly lower than the penalty would be for not paying taxes on time.

There are still plenty of opportunities out there for small businesses who have good credit record to take advantage of their business’ credit cards. Even though lenders are stricter in their acceptance criteria than in previous years, you should not give up. Before applying for credit make sure that you meet all the requirements for acceptance. Every time your credit is check, the credit score goes down. As a result, only apply for cards when you feel confident that you will be accepted.

By: Ron Lerman

Keep it Business, Not Personal

admin — Mon, 07 Sep 2009 16:17:02 +0000

Managing a small corporation, as well as having a home-based business myself, I have learned how important it is to keep personal and business matters separate. Not only does it make life less confusing, it can also save you money on your taxes.

The first thing I recommend is to open a separate checking account just for your business. Use this account to deposit all self-employment income. Do NOT use this account for wages received from an employer. This account needs to be totally separate. You will pay all your business related expenses solely from these funds. When you pay business expenses from your personal account, it is much more difficult to accurately track how much money you are spending for your business. And, missed expenses could mean missed tax deductions!

The other suggestion I have is to open a credit card specifically for your business expenses. Make sure you choose a card that suits you and your business well: i.e. cash back, travel rewards, etc. Use this card for all your business purchases and of course, make payments to it with your new business checking account. For more detailed benefits on a dedicated business credit card, I highly recommend reading Charles Clar’s article at http://creditcards.youngparentsmagazine.com/A-Dedicated-Credit-Card.htm

Last but not least, I recommend purchasing some form of accounting software. It doesn’t have to be anything fancy or expensive, just a place for you to enter your income and expenses for your business. Even a very simple program can provide you with financial reports demonstrating your company’s profitability, as well as help you to set a budget. Most programs also give you the option to print reports that aid in tax preparation.

As with any other financial decision, I highly recommend you meet with an accountant or tax preparer on an annual basis at the very least. He/She will be able to direct you in the best ways to make the most of your hard earned money. But remember, the harder you work at keeping your business and personal records separate, the easier it will be for your accountant to help you. Best of luck in your business.

By: Jennifer Tarzian

Small Businesses Don’t Need a Business Credit Card Do They?

admin — Wed, 19 Aug 2009 22:43:56 +0000

Many a small business owner won’t bother to get a credit card for his or her business. Why bother, after all? Checks work, and do you really want to risk getting a credit card for your business? Just one more thing to keep track of.

A business credit card is useful for just about any business. It’s good for your business to have a credit history in its own name. And there are other advantages as well.

Expense Tracking

Having a separate business credit card means you can more easily keep your personal and business expenses separate. This is great come tax time, when you need to be splitting out the deductible versus nondeductible items. It’s also just good bookkeeping.

Lots of Options

Just as with personal cards, a business credit card comes with plenty of options. You can find low rate cards, rewards cards and so forth. You can authorize various people to use the account, so that if you have a trusted employee, they can easily make business purchases without you having to reimburse them. It can make life much easier.

Easier Purchases

You know how much of a pain it can be going out to buy supplies for your business. If you don’t have a credit card, that means using your personal card, a check, or cash. None of these is as convenient as the business credit card, and they add to the challenge of keeping your books in order.

And just like any other credit card, if you really need to carry a balance you can. No need to ask the bank for a loan or carry the debt on your personal card. This allows you to keep the amount you are paying in interest due to your card separate from any interest you may pay on your personal credit.

There’s nothing like a credit card for smoothing out your cash flow as a small business. It can help to keep you from falling behind on bills, although you do not want to rely on debt to keep up with all your bills for too long. That’s just not healthy for individuals or for businesses. But for getting past short term cash flow issues, there are few easier ways.

Take the time to explore your options. A wisely used credit card can help your business grow more quickly and is a wonderful tool. Don’t skip it just because you don’t think you need credit for your business. Better to have the credit there for when you do, especially if it doesn’t cost you anything to have it there.

By: Stephanie Foster