Five tips for your business credit card

Using a credit card to pay expenses for your business requires careful management, given the high interest rates that are associated with credit card repayments. That's why if you do use a credit card it is imperative that you understand how your card works and what you can gain from using it properly.

Below are five tips discussed in Business Review Australia that will help you organise your spending and business operations. 

1. Choose a card that will give you an added benefit
One benefit of using a credit card to make payments is that different cards offer different perks every time you pay. The advantage of using a business credit card will generally vary, with some cards offering tax deductions on your spending and other cards simply offering frequent flyer points.

However, you should never make payments with your credit card simply to earn reward points and should always be aware of how much money you owe and whether you have the cash flow to fund the payment.

2. Clearer records
Using a business credit card will also give you the opportunity to keep clearer records of your business expenditure. All your payments will be on the monthly statement making it a lot easier to see all the transaction in one place.

3. Making it easy for tax time
Using a business credit card as oppose to your personal credit card will allow you to easily separate expenses come tax time. This allows you to save a lot of time at the end of the financial year as your accountant is left to filter through your personal statement to separate each transaction.

4. Build a positive credit score
The constant use of a credit card is also extremely beneficial if you are trying to build up a positive credit score. If you find your business going through a period of growth you can use your credit card statements as evidence of your payment history and apply for loans or other forms of credit much quicker.

If you're curious about your current credit score visit Checkyourcredit.com.au.

5. Pay on time
This one seems obvious, but paying on time will not only save you a lot of money in interest, it will also keep your credit score inline. Many credit cards will have a set timeframe before the interest free period ends so ensure you are aware of this timeframe and only make a purchase on your card if you can meet the payment within that period.

By understanding the full set of features on your card you will be able to effectively manage payments and receive the benefits of your card without the added risk. But if you decide that a credit card is still too risky for your business, here are six alternatives that are available.

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