Small Business Credit Card
Credit cards are a convenient way of paying for supplies
used by the business. However, many banks are hesitant to issue a small business
credit card to a small company. The problem for the bank is that it may be
hard for them to get their money back if business goes wrong.
One way around this problem is to acta as a personal
guarantor. This means that if the small business credit card balance is not paid
off, then the guarantor would be liable.
An even easier way is to apply for a small business credit
card in your own name. However, if doing so, it is advisable to use one small
business credit card for the business exclusively. You can then apply for a
different credit card for personal expenses. When signing up personally, it should be absolutely no problem
to get a credit card from a major bank such as Bank of America or Citibank, provided that you have a good credit rating.
Best Practices When Using Your Small Business Credit Card
Good accounting principles dictate that you should never use
a small business credit card to pay for personal expenses. Business and
personal expenses should always be separated. Separation of expenses will make it easier
work out your financial statements and taxes at the end of the year.
