Companies of all sizes, from sole traders and small business owners to large corporates find that a business credit card provides a convenient and flexible option for making purchases.
They can be particularly attactive for small business owners as they can eliminate the need for cash floats or petty cash. Cards can be issued to employees, with a spending limit approved by the business owner, meaning staff purchases can be effectively managed.
A company credit card can be convenient for everyday expenses such as petrol and stationery. Using a company credit card for internet purchases affords you a greater level of protection in the event that what you ordered does not arrive or is faulty.
They can also be handy for last minute purchases or unexpected expenses, such as a new PC or office equipment.
An additional advantage can be to control cash flow. For instance you could designate a certain business credit card for travel expenses, allowing you to closely monitor spending. You can select which employees receive cards and set different credit limits for each card.
If is not advisable to use a business credit card as the sole means of finance for the business. Some firms use credit cards for working capital but this is far from ideal as the interest charges and fees will build up, particularly if cash withdrawls are made. Furthermore cheaper sources of borrowing such as such as a loan should be explored first.
If you make purchases with a credit card and don't pay off the bill in full, you'll incur interest charges. You therefore need to set aside time to monitor your credit card bills meticulously, so you're constantly aware of how much you being charged in fees and interest. A plastic card for payment offers convenience but the time lapse between purchase and payment means it can be tempting to overextend and build up debts for the business.
There is a wide variety of cards on the market and choosing the best card for your business can be difficult. Use the comparision facility above to see some of the deals available.