Difference between using a Business Credit Card vs. a Personal Credit Card for your small business

Whether you are a small business owner or an employee, you may use your personal credit card to buy the stuff that you need or purchase some materials for your business.

On the other hand, a specific type of card, which is a business credit card that can grant you some special promotions, perks, and interesting features that you should not forget.

Additionally, there are some business owners that utilize their personal credit card as their main mode of paying their bills and at the same time as their “business card” without any worries or conflict.

However, if you hired some employees to run your business and are aiming to open an expansion in the near future, you must consider investing and remember to make a regular deposit to your bank account more often in order to be granted a higher credit limit or bank loan in the future. You must start with a small business credit card at the start of your journey as a business owner and later change it to a more appropriate one as time goes by.

Indeed, there are moments in your life that having a business credit card will provide you comfort and some wonderful perks that are more suitable for your spending habits and type of lifestyle. If you have a Luxury Cards Mastercard Titanium Card or a Chime Credit Builder Visa, you can use them to purchase the materials or items that you need.

Are you still undecided which type of card you should avail of? Torn between having a personal or business card with no additional or hidden fees? Here are some points to consider before making such a decision.

For Recordkeeping Purposes

If you are availing of a loan from your trusted bank or filing your annual tax return, it is a great advantage to have well-organized accounting and financial records. It can significantly help you to save more time and money. Nothing beats an organized workplace and a great working environment for your business venture.

Having online banking or ATM banking might help you lessen any unnecessary time lining up to the bank for a deposit or withdrawing your money. If you consider using a personal credit card in lieu of a business type, there is no significant difference regarding the tax aspect.

Moreover, you should consider prioritizing your expenses and only use your card such as your BBVA Compass Visa Business Reward Credit Card if it is for business matters only. Through this approach, you will have a high chance of avoiding any potential issues, confusion, or business-related problems soon.

Building Business Credit

Having a personal credit card cannot generally help you accumulate business credit, even if your current business and personal credit card are somewhat linked. For you to increase your credit, you should use your business credit card in paying your bills before the due date. You must also determine whether you will avail Small/ Business Bank Account or just keep your money in the safety deposit box in your home or office.

On the other hand, your personal credit can make you eligible for some financial products, this may include contracting loans or availing of other types of credit cards. It can also be a factor to consider with regard to your interest rate or the term of payment. Likewise, your business credit score is a great determinant of your business’s ability to apply for the majority credit lines, loans, credit, and material or unit leases.

Furthermore, your business credit is a significant factor in the amount you need to pay for business insurance. It is beneficial if you are keen on looking after your essentials such as your Lili Banking-Visa Credit Card for freelancers or BBVA Compass Secured Visa Business Credit Card because it may affect your venture and personal credit if not monitored properly or got lost.

Also, using your personal credit will eventually take longer in increasing your business credit. To expedite this matter is to open and utilize a business credit card in paying some bills and having financial transactions.

To sum, it is very important to know what a suitable credit card for you with respect to your needs is, business demands, and personal reasons. Taking into consideration all the pros and cons of availing either a business or personal credit card can be a great help.

To find out more on business credit cards click here.