Paying for Business Expenses Applying for a business credit card is something a small business should seriously consider for itself. Business credit cards can provide a range of benefits to a business. They allow a company to build up credit for better borrowing conditions down the road. They’re also quite easy to apply for. In this article, we’ll go over how to apply for a business credit card and other important points to note. What Is a Business Credit Card? A business credit card is a credit card that is intended for business expenses. These cards are not meant for any individual’s personal use, but they are available to businesses of all sizes. What Is a Business Credit Card Used For? Business credit cards are meant for business expenses, and as such, they come with several perks that you wouldn’t get with a normal credit card. Business credit cards typically have far higher credit limits than normal cards, but they are also harder to qualify for. [youmaylike] As a business phenomenon, business credit cards vary their offers greatly, and certain cards are meant for certain businesses. They are also highly customizable when it comes to individual payment terms. Businesses don't always have consistent incomes like individuals do, and business credit cards handle this problem. These cards are used to gain access to a long line of credit, to control employee spending on business expenses and more. One of their other common uses is to make accounting easier, as putting all business expenses on one separate account makes reporting to the Internal Revenue Service easier. In the end, there are many uses for a business credit card. Why Would I Need a Business Credit Card? You might not need one, but if you run a business, you’ll be leaving money on the table by not at least looking into them. Business credit cards can solve many of the problems business owners face. If you need employees to make purchases for the business, a business credit card is the safest option. These cards can be given to authorized users, a status you can easily give to any of your employees. From here, these cards make it easy to monitor employee spending and spot any discrepancies. You can attach customized user privileges to each card to limit spending and place limits on where the card can be used. As mentioned, if you feel like your credit is too limited, business credit cards are a sure way around low credit. According to the American Bankers Association, the average monthly payment on a business credit card is twice as high as the average payment on a normal one. If you’ve found yourself annoyed with the Internal Revenue Service over the complicated reporting processes for business owners, you’re not alone. This is where a business credit card can solve another problem. Simply handing over your business credit card statements to your accountant will make them love you. It will also provide them with the information they need to predict future spending. Another great use for a business credit card is lifting your liability for debts. Liability for credit card debt is determined by the liability offered by the card. If you’re using a personal credit card for business expenses, you are liable for all debts. On the other hand, if you use a business credit card with commercial liability, your business is liable for any debts, which changes the game. Keep in mind that some cards offer joint liability, which leaves both you and your business liable for any debts. Make sure you know what you’re getting into before signing any paperwork. Lastly, just as personal credit cards offer rewards programs, so do business cards. The main difference here is that business credit card rewards are tailored to your business needs. How to Apply for a Business Credit Card Before you apply for a business credit card, you should make sure you’re eligible. For the most part, you only require the following to be able to apply for one: A legal name for your business. A business structure to apply with, such as a Limited Liability Corporation. An explanation of the nature of your business. You’ll typically be given a list of industry types to choose from. A tax ID number issued by the Internal Revenue Service Your roll in the business you’re representing Various business/financial information including: Annual revenue. Number of employees. Length of time in business. Estimated monthly expenses. If you have this information ready, you can apply for a business credit card. At this point, it would be wise to shop around and find the best option for your business. Your decision on the business credit card you choose will have larger ramifications than your choice of a personal credit card. Applying for a business credit card is much the same as applying for a personal one. There are a few differences, but the main thing to remember is that business credit cards are taken more seriously than normal ones, so you’ll have to face a higher bar of entry. This doesn’t mean getting a business credit card is hard, but it does mean you need to arrive more well-prepared than you normally would. To make things easier, you can prepare for certain obstacles in advance. You may need to sign a personal guarantee that you will pay off any debts. Also keep in mind that if you’re the one applying for a business credit card, and your business doesn’t already have one, they will conduct a personal credit check. It may be best to try to optimize your personal credit if you plan on applying for a business credit card in the future. Some Options at a Glance Here are some of the most popular options for small business credit cards: Chase Inc Business Preferred This is a great option for a few reasons. With the Business Preferred card from Chase Inc, you get 80,000 ultimate reward points when you spend $5,000 with the card in the first three months. The card also provides generic, but highly useful benefits for business owners. Business Platinum Card from American Express The Business Platinum is ideal for businesses that spend a lot on flights and travel. This card offers numerous rewards on flight and hotel expenses and makes sure you get something serious back if you use it for these expenses. Chase Inc Business Unlimited The Chase Inc Business Unlimited offers unlimited 1.5% cash back. While we’ve said enough already, they also offer several other perks that are overshadowed by their first one.
The Best Personal Finance Apps
If you've tried to stick to a budget in the past, you understand how difficult it can be to control your spending. For many people, the problem isn't a lack of willpower, though. You may have an income shortfall that makes budgeting impossible. You may be at the mercy of one financial emergency after another or you may be dealing with an irregular income.
Tracking your spending and budgeting are proven ways to make your hard-earned cash work for you. Personal finance apps offer 24/7 access to your plan, so you'll be able to make crucial day-to-day financial decisions with confidence.
Why You Should Use a Personal Finance App
While budgeting is a necessary part of managing your money, there's a lot more to becoming financially successful than mastering basic math skills.
Your smartphone functions as your calendar, photo album and alarm. It serves as your connection to the outside world for both work and personal purposes. So, it makes sense that your budget can live there, as well.
A well-designed personal finance app works as a budget, but it also helps you track your bill due dates, so you aren't left with a late fee and a black mark on your credit report.
Depending on how much support you want, you can connect with an app that offers interest-free payday advances to help you get out of a jam while avoiding more expensive short-term loan options.
Some of the best apps also offer short videos to help keep you on track, or one-on-one sessions with a money counselor to help you stay motivated and answer your questions.
You may want to use more than one app, depending on which services best meet your needs. For example, if you already use Mint, you may want to try out Goodbudget to better understand and control your spending habits.
There isn't a one-size-fits-all budgeting solution, so feel free to try a few of these options before settling in for the long haul. All the personal finance apps highlighted here have a free version, except You Need A Budget (YNAB), which offers a 34-day free trial. Each of these apps has the potential to help you track, organize and direct your money so you can start (finally) making progress toward your goals.
1. PocketGuard
Track your bills, income and savings moment-by-moment with PocketGuard. This thoughtfully created app helps you discover ways to save money, projects hypothetical spending based on your habits, and lets you know how much money you'll have left after you pay bills.
It's not easy to make decisions on-the-go about discretionary spending. PocketGuard helps you understand your financial situation in the moment with just a quick glance at your smartphone.
2. You Need a Budget (YNAB)
It may not come naturally at first, but you'll soon learn how the decisions you make day-to-day about your money could affect your future with YNAB. Loved by young professionals, this app is intuitive. It focuses on basic principals of money management and has the potential to change how you think about your income and expenses.
A series of one-minute videos help you understand how to set up the app so it works with your financial accounts. Free online education, a generous introductory period, and the ability to account for every dollar of your income are a few attributes that make this one of the most powerful personal finance apps of 2020.
3. Albert
If you want an app that handles the heavy lifting, Albert is worth a try. It keeps track of your spending, income and all your accounts. Budget creation is automatic. Albert even puts money away in a savings account for you. If you get into a tough financial spot before payday, you can get a $100 interest-free advance without a credit check. The app also offers simple recommendations to help improve your overall financial health.
4. Goodbudget
If the idea of splitting your cash into envelopes to help you control spending seems like it would work for you, try Goodbudget. The idea of carrying cash makes some people uncomfortable, but with Goodbudget, you get the benefits of the envelope method without the risk.
Access up to ten digital "envelopes" inside the app to use with one financial account to help budget your income in the free version. With the pro version, you'll get financial tools, unlimited envelopes to use with unlimited financial accounts, as well as access to your account history to help take your budgeting to the next level.
Final Notes
No matter which budgeting app you choose, give yourself some time to get used to how it works with your day-to-day spending. When you find a budgeting app that meets your individual needs, controlling your spending and making a plan for your money becomes much easier. Soon, you'll see real progress toward your financial goals.
For more budgeting app options, including those for small businesses, check out our additional blog post on budgeting apps.