How To Set Up a Small Business Credit Card Account

Whether your business endeavor functions as a sole proprietorship or you have just formed a corporation, creating a separate bank account should be the first step in the management of your finances. When the flow of money from personal accounts is kept separate, it becomes a much simpler process to identify revenue and expenses.

A small business credit card affords a newly established business the opportunity to build business credit, which will undoubtedly prove valuable down the road as the business grows and the need for capital is made available in the form of lines of credit or low interest loans.

A good small business credit card can also make available immediate buying power, be a source for interest-free short term loans, allow the tracking of expenses, and earn rewards on purchases (not all cards offer a reward program so look for banks that do).

When you are ready to apply for a card, there are links on VISA and MASTERCARD websites, that list cooperating banks. You can phone them for an application, but it is probably more convenient to apply on line, unless you are not comfortable with listing your social security number, then you can always request that an application be mailed to you. You can view various credit card offers and terms at:

Calculate the amount of revolving credit that your company will require, and also the number of credit cards for other employees you will need, if applicable. There are some card issuers who offer a type of reporting service which allows the monitoring of employee expenses and allows the downloading of data to software like Quickbooks. Shop around for low, or no annual fee, low interest and customer service 24/7. This is where already having a relationship established with a bank, comes in handy. It stands to reason that people already familiar with you and having a positive history with you, may offer more favorable terms. Ask about merchant acceptance and customized account reports tailored to your individual needs. If your company employs more than one hundred individuals it may be wise to purchase a corporate card.

Over two-thirds of small businesses use a credit card account for expenses, with only about 40% using a business credit card exclusively, as suggested by a Tower Group report. Should a small business credit card account be the account of choice over a personal card? Yes! says Darrell Zahorsky in his "6 Steps to Effective Small Business Credit Card Management, "...with prudent use and [careful] management..."


Share this article!

Follow us!

Find more helpful articles: