Business credit cards can be powerful financial tools for companies of all sizes, offering a range of benefits that can boost business credit, streamline operations, improve cash flow, and enhance financial management.
This post explores 10 of the most important benefits of using business credit cards and how they can help business owners achieve their financial goals.
1. Keep personal and business finances separate
Many small business owners use their personal credit cards for business expenses at least once in a while, which requires extra accounting steps to keep your finances above board. Using a business card instead makes it much easier to keep your personal and business finances properly separated.
In larger companies, employees may use personal cards for reimbursable business expenses, leaving the accounting team to:
- Manage expense reports
- Track down receipts and other documentation
- Verify that expenses are within the company policy
- Cut checks or otherwise pay employees back for those expenses
Giving employees business cards can simplify your expense accounting, leading to better financial organization.
2. Less impact on personal credit
For small business owners, using a business credit card can also free up your personal credit.
As a general rule, the more debt you're carrying, the more your credit score drops due to high "credit utilization." When you use your personal credit for your business, your personal credit score can drop.
However, as long as your business card isn't tied to your personal credit, your business can use that card without impacting your personal credit utilization or your personal credit score.
Just be sure to ask when applying for a card—many business credit cards require you to accept personal responsibility for the card and any balance you carry.
3. Boost your business credit rating
By using small business credit cards responsibly and making timely payments, you can help establish and improve your business credit score. This can improve your company's access to financing, get you better terms from suppliers, and increase your credibility with lenders.
The trick is that your business card needs to report your card activity and payments to business credit agencies—not every card does. So if you're applying for a business credit card to boost your company's credit score, be sure to ask whether the balances and payments will be reported.
4. Improve business cash flow
Business credit cards offer a revolving line of credit, meaning you only borrow what you need. This can help you save money on interest while giving you immediate access to funds for your business spending.
This flexibility in cash flow management can help your business cover unexpected costs and seize opportunities for growth without disrupting operations. You can also leverage credit card financing to delay cash outflows for a few weeks or even a few months—letting you buy what you need now and pay over time.
Business credit card financing is especially helpful when you're waiting on client payments that haven't cleared yet. The cash is coming—you just don't have it in your hands yet. A business card can help you bridge those gaps, giving you a way to buy what you need without having to pay for it right away.
5. Numerous company-specific rewards
Most business credit cards come with rewards programs tailored to business needs. These rewards can include cash-back percentages, travel benefits, mileage earning, and welcome bonuses that can help offset business expenses.
By strategically leveraging rewards programs, your company can maximize its purchasing power and offset operational costs.
6. Increased multipliers in certain categories
Business card programs may give you more rewards points per dollar spent in certain business-related categories such as restaurants or travel. These multipliers can increase the effective reward percentage for things like cash back or gift cards.
When comparing cards, be sure to dig into the numbers when it comes to rewards programs and see how many points per dollar you'll get across the categories you use most often.
7. Budget controls
When you get a business card that lets you assign cards to employees, you may be able to set spending limits on those cards to help enforce your budgets and company expense policies.
For example, you could assign enough funds to the head of your marketing department to cover the monthly advertising budget, while giving remote workers just enough to cover reimbursable home office expenses per your company policy.
Look for a card program that lets you set budget limits by card, employee, department, and more.
8. Streamlined expense management
When employees make purchases for your business using a corporate card, those expenses show up on the card—so your finance team doesn't have to wait until expense reports come in at the end of the month to see your expenses. That alone can streamline your team's work and speed up your monthly close.
Still, not every business card offers real-time reporting. In some cases, purchases won't post for hours or even days, making it that much harder to collect information like categories or receipts.
Make sure the card you choose offers real-time payment reporting, so you can see expenses the moment they happen.
9. Instant card funding and defunding
Ideally, your business card should come with the ability to instantly fund or defund employee cards. Maybe a department head needs additional funds for a purchase that's just been approved by the finance team—you should be able to add funds to that card immediately.
Even more important, the moment an employee leaves the company, you should be able to defund that card in an instant to keep your business funds safe. Make sure the card you pick lets you add or remove funding whenever you need to, without costly delays.
10. Virtual cards for added security
In today's digital era, some business cards come with the ability to create virtual cards. These powerful tools can help protect your finances by limiting your exposure in case a card number is compromised.
Do you need to make a one-time purchase online? Create a virtual card that's only funded for that exact amount. The card has everything a "normal" credit card does, just without the plastic—a name, number, security code, and even an expiration date—but it also has a one-time limit that you control. Once it's been used for that purchase, the card won't work anymore.
You can also fund virtual cards automatically each month with a certain amount, which is perfect for digital subscriptions and other recurring payments. So you could have a card that's dedicated to your internet payments, for example, and another for every software subscription. If you ever need to cancel a subscription, you can defund the card at the same time—making sure it won't be charged again.
Benefits of BILL Spend & Expense
When it comes to business cards, the BILL Divvy Card powered by Visa* (issued by Cross River Bank, member FDIC) comes with BILL Spend & Expense software that's free to use.
While it isn’t technically a credit card, this powerful business charge card and the free-to-use software that comes with it offer all the other benefits listed above, and a whole lot more.
Card rewards program
- Cash back: Can can be deposited directly into your bank account via ACH or mailed by check
- Statement credit: Applied as an adjustment on your next monthly statement
- Travel: Applied as a reimbursement after you book travel using the card
- Gift cards: Offered for a variety of brands and stores so you can choose your favorite
Free-to-use software
Control your budgets, streamline expense management, create virtual cards, and more with BILL Spend & Expense.
What our customers have to say
“A free card service that also gives us rewards—you can’t beat that.”—Artemis Health
“The BILL Spend & Expense solution ended up being so fantastic, because as we onboarded people, we could give them virtual cards or physical cards. We would set limits based on their level of responsibility. A lot of our employee spending concerns were immediately alleviated, because you could control the amount of spending. You could look at the budgets and receipts at any time, on a real time basis.”—Tower 28 Beauty
To learn more, take a live BILL Spend & Expense demo.
FAQs about the benefits of business credit cards
Here are quick, easy answers to the most common questions about the benefits of a business credit card.
Is it good for a small business to have a credit card?
Business credit cards offer several advantages to small businesses, from separating business and personal finances to rewards for eligible purchases. As long as you use your business credit card responsibly and stay on top of any employee cards you distribute, a small business credit card can be an excellent financial tool to help you manage your cash flow.
At what point should you get a business credit card?
Any type of business can benefit from a business credit card, even micro start-ups or part-time entrepreneurs. While there's no magic benchmark or threshold for opening a business credit card, you might want to consider one as soon as you start making regular, dedicated purchases for your business.
To learn more, read this next: "When should you get a business credit card?"
*The BILL Divvy Card is issued by Cross River Bank, member FDIC, and is not a deposit product.
