How to Use a Business Credit Card

Using a business credit card responsibly can help build your business credit score, which can help you access other types of financing in the future. Business credit cards are also great tools for managing your cash flow.

Logistically speaking, here’s how to use a business credit card:

• Charge business expenses to the card.

• Receive a statement that specifies how much you borrowed over the statement period and how much you need to pay back.

• Make at least the minimum payment before the due date.

• Earn rewards, such as cash back or points. 

But the following tips can help you get the most value out of your business credit card.

How to use a business credit card wisely

1. Pay your bill on time and in full whenever possible

Credit cards carry higher annual percentage rates (APRs) than most other forms of business financing. If you don’t pay off your bill in full by the due date, you’ll owe interest on the remaining balance. Try to avoid paying interest whenever you can. If you need flexible financing but are consistently carrying a balance, a business line of credit may be a lower interest option if you qualify.

2. Choose the right card for your business

Most business credit cards offer rewards. Look for a cash-back business credit card with extra earnings on the categories most relevant to your business, like gas or office supplies. If you don’t have specific spending patterns, a flat-rate cash-back card can rack up rewards on all your expenses.

If you or your staff travel often, you might want a travel business credit card that offers more specific rewards — like miles on your preferred airline, status at your preferred hotel chain or points that can be redeemed for travel.

3. Monitor your credit limit

Business credit cards are valuable in part because they offer you credit when you need it, without a long application period. Try to keep your balance well below your credit limit so that you have plenty of credit available if you need it in a pinch.

4. Deduct interest and annual fees on your taxes

The expenses associated with maintaining a business credit card, including annual fees, can be deducted on your business taxes. (There are plenty of no annual fee business credit cards, though.) Plus, when you use your credit card for your business spending, it should be easy to monitor your business expenses so that you can deduct those too.

5. Ensure accountability on employee cards

One advantage of business credit cards? You can issue a large number of employee credit cards, usually for no additional fee. That can empower your employees to make purchases on behalf of your business, reduce the need for reimbursements and help you track spending. Often, you can set up controls that limit how these cards can be used, but you should also have clear policies around which employees can receive a card and what they’re allowed to use it for.

If your company is larger and you want advanced, highly customizable spending controls, explore corporate cards.

How to use a business credit card as a startup

If you have good or excellent credit (generally defined as a FICO score of 690 or higher), business credit cards are available to new businesses.

If you’re starting up a business, you can use a business credit card to do the following:

• Access financing. Startups don’t generally have access to business loans, but credit cards offer access to short-term, flexible financing.

• Access zero-interest financing, especially. You can use a business credit card with a 0% APR intro period to pay off purchases over time with no interest.

• Earn a sign-up bonus. If you meet certain usage requirements, like using a business credit card to spend a certain amount of money in your first few months of having it, your card issuer may give you a reward in the form of cash or points.

• Build your business credit. Using a business credit card and paying your bill on time can help your business build its credit. 

• Organize your finances. Separating your business and personal finances is important for every business owner. Opening a business credit card, using it for your business purchases and syncing it with your accounting software is one way to keep the two apart.

How to use business credit cards to grow your business

Entrepreneurs with businesses of all ages can use business credit cards to do the following: