Changes made to the credit CARD law are only applicable to personal credit cards. For business credit cards, most of the provisions do not apply. For this reason, business owners who use business credit cards are advised to be more careful on how they use and manage their credit card accounts.In this post, lets talk about the basic facts that owners of business credit cards or those who plan to get one must understand. First, lets talk about the risks and then we will consider the advantages.Business Credit Card and Personal LiabilityBusiness credit cards enable business owners to separate personal and business finances. This prevents confusion especially as expenditures are bound to increase as the business grows. Despite being a separate account however, the business credit card owner is not exempted from liability. This means that the account holder is accountable to pay for the debts incurred using the business credit card.Before signing up your business credit card application, be sure to read and understand the Terms and Conditions, particularly the Liability Clause. As the owner of the business, you accept responsibility for the debts in that account. IF you plan to distribute employee credit cards, you need to keep in mind this crucial fact.To protect your account, a business owner must pay close attention to how the business credit card is used for financing the business. All charges will be reflected in your account but you need to keep an eye for employees who could be using their supplementary card for personal purposes.Enjoy Business Credit Card BenefitsCertain features are exclusively offered for business credit cardholders. This provisions include a higher credit line, yearly account summary reports, more attractive reward programs, business credit reporting, just to name a few. Why would you need a higher credit line? A high credit limit reduces the risk of maximizing or exceeding your limit which can result to penalty charges and lower score. Keep in mind that to maintain an excellent credit rating, you must keep your -to-debt ratio at a low level. Aside from the monthly statement of account, a yearly account summary is also provided. This document is an important reference when doing your yearly inventory and in preparing your business taxes. Through this report, it would be easy to determine which of your business expenses are eligible for tax deductions and tax credit.Credit cards for small business also offer bigger reward programs compared to personal reward credit cards. By choosing a reward program that complements your business, you can cut back on your costs and enjoy special perks and privileges.Last but not the least, only credit cards for business enable you to build corporate credit as you use your credit card for business expenses. The key is to keep your credit limit usage minimal and to pay your charges on time. Keep in mind that business credit trackers are different from consumer credit reporting agencies so you must look for a business credit card that will report your payments to the business credit bureaus like D&B.
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ABOUT THE AUTHOR
Pamela Williams is a Loan Consultant, Internet Marketer, Writer and owner of BusinessCreditCardSite.com, a finance company in Las Vegas, Nevada that provides support for businesses all across the US particularly with obtaining credit cards for business. Visit http://www.businesscreditcardsite.com
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