Are you considering a credit card to fund your new business? Starting a new business needs a lot of planning, among which financial planning is one of the most crucial. In financial planning for a new start-up, consider considering a credit card. Considering a credit card for your business can be a smart decision, especially when starting from scratch. A credit card may help you with various business tasks like piped gas bill, office renovation, etc.
If you plan to do so, this article may help you. Go through this article to understand the benefits of credit cards for start-ups. Also, you will find other details relevant to your startup credit cards. You can get help from various credit card bill apps if you need any assistance.
Benefits of a credit card for start-ups
- You can create your business credit score with a business credit card. If your credit score is higher, you can get more financial facilities from banks or card issuing companies.
- With a credit card for your start-up, you do not need to think about regular cash flow in the business. Whenever you need to regulate emergency cash, you can take the help of a credit card.
- A business credit card will help you enjoy various rewards and loyalty programs. With those rewards, you can save on your business expenses.
- Business credit cards help to manage every single expense. It will help track every employee’s expenses related to the business. In this way, you can understand the fund and the expenses you should follow to maintain your business.
How to avail of a business credit card for a start-up
So, you are all set to start your own business and need a credit card. But how will you get one? First, if your business is less than 3 years old, you must apply for a credit card based on your credit history. Having a strong credit score is very important to make the lender understand that you can pay your bills on time. But the thing is, when you get a business credit card based on your credit score, you can increase your business credit score.
Secondly, you must produce many documents for the credit card issuer authorities. Here is the list of those documents.
- ID card
- Identification details of other stakeholders
- Business registration details
- Financial report in case of one or two-year-old start-up
- Bank statements of business account
- P&L reports
Who will Qualify for a business credit card?
- Sole proprietors
- Freelancers
- Small business owners
- Large business owners
- Limited liability companies
- Corporations
How does a business credit card work?
The operation of business credit cards is very similar to that of personal credit cards. You will just put business purchases on your company credit card. You will then receive a statement with your overall balance owed and the minimum amount due after the conclusion of each billing cycle.
Depending on your various business payment like business trips, piped gas bill payment, etc, the interest rate might change. You wouldn’t pay any interest on those purchases if you paid your bill in full each month. You will begin to accrue interest on your balance if you decide to carry a balance. Remember that there are different types of interest rates on business credit cards. It may change depending on the type of payments you make. Your chances of having a pleasant business transaction increase as your creditworthiness increases.
You will see various types when applying for a business credit card. Although annual percentage rates (APRs) depend on the creditworthiness of the entire business entity, some may have higher or lower APRs. Different reward structures may be available on business credit cards. Some people might have to spend a lot on marketing, advertising, and similar expenses.
So, here are the details of a business credit card. Hopefully, you understood that a credit card might be helpful for your business entity to maintain a good cash flow. It also helps to recharge mobile, pay business trip, etc. It also provides a lot of other benefits. You can apply for a business credit card online, like mobile credit card apps.