What Is A Business Credit Card?

What is a business credit card? Well, banks keep launching various types of credit cards based on their target customer and their usage. Whether it is a classic card, a platinum card, a corporate card or a business card. Similarly, this is a type of credit card as well. Read on to learn more about this credit card and its usage.

A business credit card is often confused with a corporate credit card by many. However, they’re not the same. A corporate credit card is issued by an employer to its employees for certain business transactions. Meanwhile, a business credit card can be directly applied for by any individual who runs a small business, is a self-employed professional, a merchant or even a freelance worker.

While the expenses for a corporate credit card are settled by the organization, the expenses on a business credit card have to be paid by you directly. In simple terms, a business credit card is similar to a personal credit card, the only difference being that this one is used for business transactions.

Also Read: Four Questions To Ask Yourself Before Getting A Credit Card

As mentioned earlier, any individual who is either self-employed or runs a business or even works as a freelancer can use a business credit card. Mainly, it is meant for anyone who wants to keep their business transactions separate from their personal transactions. Moreover, it also helps you keep a track of your business transactions while earning special benefits and rewards.

Business credit cards work almost exactly the way a personal credit card does. However, they do come with a higher spending limit and better reward programs. No matter which bank you take them from, they’ll have some incredible benefits fit for your business. That is exactly why it’s a little difficult to determine which are the best business credit cards because they all have some feature that make them pop.

Similar to personal credit cards, even a business credit card will track your expenses over the month, generate a bill and expect payment before the due date. Even here, if you make the full payment in one go, you aren’t charged any interest. However, if you choose to pay partially, the rate of interest may be more than that of a personal credit card. The deal you get is based on the credibility of your business venture.

A business card comes with various benefits and advantages for the user. Enlisted below are some of the advantages of using a business credit card:

1. Higher Credit - As compared to personal credit cards, here you get a higher credit limit. This ensures better cash flow for your business.

2. Business Tracking - You can not only keep your personal and business expenses separate, but also track your business transactions with the various tools provided by banks.

3. Credit Score Building - Taking a different credit card for your business expenses, no matter how small, is a great step in building a good credit score for your business.

4. Generous Joining Bonus - Several banks give out a generous joining bonus to anyone going for a business credit card. This could include reward points, cashback opportunities and more.

5. Fruitful Rewards - Rewards and benefits are much higher in business credit cards. Here, you might get reward points on travel, hotel bookings and much more.

6. Interest-free Period Extensions - Depending on the size and credibility of your business, some banks even offer extensions on the credit-free period, above and beyond the 21-day period.

7. Employee Credit Cards - Business owners can also give similar business credit cards to their employees while being able to track their expenses. What’s more? You can even make a lump sum payment for all the business credit cards in one go.

Also Read: More Swipe Than Type: In-Store Credit Card Payments Outpace Online Spends

While it’s difficult to choose one among some of the best business credit cards offered by various banks, once you’ve chosen the bank, it’s a pretty straightforward process. So before you apply for a business credit card, make sure to define your business correctly, check your personal credit score and compare business credit cards from your preferred banks.

Then all you have to do is, visit the bank’s nearest branch or apply online. Don’t forget to keep all the necessary documents related to your business ready when you do so.