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Published July 19, 2023
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When Are Business Credit Cards Worth It?

Business credit cards may be worth it if you want to separate personal and business expenses or need funding to cover short-term costs.

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A business credit card can be an excellent tool for assisting with the financial operation of your business as long as you use them responsibly. As with all credit cards, there are also pitfalls, so it pays to carefully examine whether a business credit card is worth it before you decide to apply.

» MORE: How to apply for a credit card

Good reasons to get a business credit card

  • To help grow a new business. If you just started your own business or are in the early stages of a new one, a business credit card can help finance growth by providing access to credit, perks and rewards.
  • To separate personal and business expenses. A business credit card can help keep your personal and business finances separate, streamlining accounting and making tax time easier.
  • To build business credit. Your personal credit history is different from your business credit history. Using a business credit card responsibly can establish a strong business credit rating. This will help you secure future loans and other forms of financing.  
  • To access larger credit limits. Business credit cards offer a higher credit limit than you may get elsewhere, so you can rack up rewards points quicker if you use the card frequently and manage it properly.
  • To claim generous sign-up bonuses. Some cards offer substantial incentives for new cardholders, especially those who travel often.
  • To get rewards. Most cards offer a range of rewards points or cashback, so the more you use the card, the more you’ll earn. That can put you towards a desired goal, such as an international flight or hotel upgrade. Paying off the card within the interest-free period means you can pocket these reward points and be in front in the long run.
  • To help with taxes. Annual fees and interest charges are tax deductible if you show that you use the card for business expenses. (Learn how to pay tax as a sole trader.)
  • To have extra cards for employees. Some cards allow you to add multiple users for the same annual fee, so you can give your employees cards at no additional cost. Sometimes, you can also set individual spending limits for each card. 
  • To ensure cash flow. Business credit cards are a good way of providing cash flow, especially in leaner business periods. You must stay caught up with your payments, though.
  • To use special business tools. Some business credit cards offer tools — like data links to MYOB and Xero — to help you get a clear picture of your monthly expenses and cash management.
  • To obtain other perks. Some business credit cards offer complimentary travel benefits. These may include travel insurance, frequent flyer program perks, airport lounge access, flight upgrades, limousine services and discounts with partner businesses, such as airlines. 

Pitfalls of business credit cards

  • Interest rates. Interest rates can run well into the 20% range and above. That’s far more than you’d pay for a standard business loan. You and your employees must use the cards responsibly to avoid these interest charges. Pay the amounts owed within the interest-free period.
  • Annual fees. Annual fees can be higher than personal credit cards, but plenty of competition exists in the marketplace. So, shop around for annual fee discounts or waivers, or opt for a no-annual-fee credit card.
  • Eligibility. Getting a credit card for business may be challenging if your revenue isn’t up to an acceptable level. In that case, you can always fall back onto a different type of credit card. Or, you could use a business loan until revenue picks up.
  • Unmanageable debt. You need to keep a tight rein on your expenses — especially if you have multiple employees on the same account— or your debt could spiral out of control.   

Should you get a business credit card?

Ultimately, the decision of whether or not to get a business credit card is a personal one.

A business credit card can help build business credit and separate personal and business expenses. These things may make it easier to grow your business and secure funding in the future. While business credit cards aren’t the only way to do this — standard business loans, sharp accounting and savvy business practices can also achieve these financial goals — they can certainly streamline the process. 

If you think a business credit card could be worth it for your business, you could consider applying. Just make sure to take the same steps you’d take to get a credit card for personal use — like comparing different card providers, types and options first — to find the best business credit card for you.


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