Deciding whether a business should carry a business credit card can be a difficult decision â€“ there are both benefits and risks to consider. Nowâ€™s a great time for banks and their business clients to discuss whether a credit card would be suitable for a business.
There are many benefits to using a credit card for business expenses, such as interest-free terms, optimizing cash flow, reward schemes, managing expenses more effectively, being able to add other people to the card (so trusted staff can make purchases), and, if managed properly, a credit card will help to build a strong credit rating.
Itâ€™s important for business owners to make it very clear to their employees just what the credit card is to be used for, so that there are no misunderstandings and the risk of employee fraud is reduced. Itâ€™s often better to give the business credit card to just one or two trusted employees, and only if they really need it to do their job effectively.
There are downsides to a credit card, such as fees and interest, being tempted to use it for personal spending, and spending over the limit. However for the most part, the benefits outweigh the risks.
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