6 benefits of business credit cards

There are several benefits to having a business credit card, including earning rewards, building business credit, separating personal and business expenses, and accessing higher credit limits.

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In this article, we’ll list the benefits of business credit cards and explain which offer the greatest impact for your business. First, though, a quick explanation of why you might want a business credit card and how they’re distinct from personal credit cards.

Why get a business credit card?

Getting a business credit card allows you to separate business expenses from personal spending, simplifying your accounting. Business credit cards also offer higher credit limits, giving your company greater purchasing power and flexibility to manage cash flow more effectively.

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In addition, business credit cards often feature rewards programs, enabling you to earn points or cashback on everyday purchases. Responsible use also builds your business credit score, which can make it easier to qualify for loans and secure favorable interest rates as your business grows.

Benefits of business credit cards

1. Separate business and personal expenses

Using a business credit card allows you to keep business and personal expenses separate. By dedicating a credit card solely to business purchases, you simplify your accounting and make tax preparation easier. Each transaction is distinctly categorized, reducing the chance of mistakenly mixing personal costs with business expenses. This clarity is not only essential for accurate bookkeeping but also aids in creating a reliable financial record for your business, which is valuable when applying for loans or managing budgets.

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Separating business and personal spending also helps protect your personal credit. While your business credit activity can impact your creditworthiness, maintaining a clear boundary between personal and business finances allows you to focus on building a strong business credit profile without exposing personal assets. This separation is key for businesses aiming to grow, as it makes tracking business-related expenses easier and protects your personal credit score.

‍2. Build your business credit score

A good business credit score helps set your company up for long-term success. It can improve your eligibility for business loans, secure more favorable interest rates, and even impact vendor relationships, making it easier to establish trade lines and negotiate payment terms. Opening a business credit card and consistently paying on time is an effective way to build and maintain your business credit.

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Additionally, most business credit cards do not report to personal credit bureaus unless there is a delinquency. This separation helps protect your personal credit, allowing you to maintain business expenses on the card without impacting your personal credit score, even if balances are high during periods of significant spending.

3. Earn business credit card rewards

One particularly valuable benefit of business credit cards is the ability to earn rewards, including cashback, points, or travel perks. Cashback is straightforward: a percentage of what you spend is refunded to your account, which you can either cash out or use as a statement credit to offset future expenses. While other reward types may only apply to eligible purchases, cashback typically applies to all purchases.

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Other types of rewards to consider are points and travel rewards. Points have the flexibility to be redeemed for options like gift cards, merchandise, or business travel. Travel rewards, meanwhile, provide benefits like airline miles, hotel upgrades, and discounts on transportation costs. You might also want to consider a card’s welcome offers, like bonus points or 0% intro APR on purchases and balance transfers.

4. Access partner rewards and perks

Partner rewards are vendor discounts in the form of credits, percentages off, or exclusive access to services. They’re distinct from points rewards, as they are not accrued by card spend, but are perks you receive when you open an account.

Partner rewards can save your company thousands of dollars on everyday business-related expenses, like software subscriptions, office supplies, and cleaning services. To get the most immediate bottom-line value from this business credit card benefit, look for partner rewards that offer discounts on services you already use. For example, if you’re already using Amazon Web Services(AWS), then find a card that gives you AWS credits or discounts that can help you reduce AWS costs.

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5. Customize controls on employee spending

Some cards let business owners set custom spending controls that help enforce your expense policy. These controls let you limit who can spend, how much they can spend, and where they can make purchases, keeping spending in check and aligned with business goals.

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Effective card controls should outline who is authorized to use the card, what types of purchases are permitted, when transactions can take place (down to specific days and hours), where purchases are allowed, and why each transaction occurs by linking it to expense categories. With these controls, you gain essential visibility into your business spending, allowing for more efficient expense management.

6. Issue unlimited employee cards

Some credit card issuers cap the number of employee cards, which can cause issues as a company grows. For example, if only ten cards are allowed but 25 employees need one, sharing cards becomes necessary, leading to visibility problems—you may not know who made a purchase, and setting individual controls isn’t possible. Employees may also need to use personal cards for business expenses. With unlimited cards, especially virtual ones, these problems are eliminated.

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Look for cards with personalized pre-approval controls to manage risk without worrying about the number of cardholders. Virtual cards can be a good alternative to physical cards, especially for employees who only need occasional purchases. After an expense request is approved, a one-time-use virtual card can be issued, covering the transaction without the need for a permanent card.

Learn how a Ramp Business Credit Card can benefit your business

Whether you’re a small business owner or run a larger organization, Ramp’s Business Credit Card offers valuable benefits like cashback rewards, custom spending controls, and seamless expense tracking, helping you save money and simplify financial management.

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Here are some of Ramp’s features to expect:

• Unlimited physical and virtual employee cards
• Built-in expense management software
• Spending limits
• Travel perks
• AI-powered insights to optimize your business cash flow
• An easy way to build your business credit history and score

Ramp comes with no annual fee, interest fees, or foreign transaction fees. You can apply using just your Employer Identification Number rather than your Social Security Number. Try a demo to see if Ramp can benefit your business..