Small-business credit card basics

According to the Tower Group, as many as two-thirds of entrepreneurs depend on the buying power of a small-business credit card to keep their businesses going. Considering the interest payments and fees associated with some cards, it might seem counterintuitive to use this kind of credit. But, used effectively, a small-business credit card has several important benefits that all business owners should consider.

• Itemize it. Many cards cater specifically to small-business owners by offering the ability to categorize the expenses you put on the card. At the end of the year, many will send you an annual expense report, which makes doing your taxes much easier.
• Rewards. Much like consumer credit cards, many business credit cards offer rewards, such as cash back on every purchase or travel miles. A word to the wise, though, rewards cards like these usually only accept well-established businesses with a strong credit report.
• Keep it separated. Mixing your business purchases with personal purchases is an enormous business accounting no-no, but it's a common mistake. If you have a small-business credit card, keep it strictly for business and keep your accounting simple.
• Build your credit. Getting a personal loan for a startup is nearly impossible; a business credit card is much easier to get. In time, as your business grows, you may find that you need a loan to take your established business to the next level. Having a small-business credit card helps your business establish its own credit, improving your chance of getting business credit down the road.

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