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.
Holiday Budgeting: How to Save Money This Holiday Season
The holidays and excessive spending go hand-in-hand for many people, but you do not have to set yourself up for overspending this year. There are a few proven ways to spend less without sacrificing quality time with family and friends. Here, we focus on holiday budgeting: ways to cut holiday spending that will not dampen the seasonal cheer or limit your ability to celebrate.
1. Create a Spending Plan
The word "budget" does not spark joy for many people. Instead, sit down with your bank account, a recent paystub and your monthly expenses. Do some quick math to figure out how much disposable income you have between now and the holidays. Use that number as the basis of your spending plan.
If you feel like there is no way to get your to-do list done with the financial resources you have available in the near future, resist the urge to whip out the credit cards.
While it may make sense to use credit during the holidays, make sure you have a detailed plan to help you prevent overspending. Credit cards often have hefty interest rates, so try to limit your spending plan to a number that you can easily pay back during January and February. After all, no one wants to be saddled with holiday credit card debt when they should be celebrating the arrival of spring.
2. Make a Detailed List of Everything You Will Spend Money On
This is in addition to your regular monthly expenses. It can be tough to know how much you will spend during the holidays if you face travel expenses and holiday parties in addition to traditional gift-giving.
Look at your calendar and make a mini spending plan for each event you plan to attend. Figure out what you would like to spend on hostess gifts, food, beverages, eating out and travel. Add that to your gift-giving spending plan. You may need to trim expenses here and there.
For example, if you have three parties to attend and plan to spend $50 on each hostess gift, think about whether you could cut that part of your budget in half without sacrificing the value of your gift.
3. Find Great Discounts
When shopping online, take advantage of discount-finding apps that automatically run coupon codes to help reduce your total at checkout. Honey has a free browser extension, as does Capital One Shopping. Rakuten provides helpful discount codes, as well as cashback when you shop online.
SnipSnap is an app that helps you find coupons while shopping in-person at stores. Snap a photo of the item you want, and the app brings up a list of coupons and sales. The app will also let you know if it is cheaper to buy the item online or from another retailer.
4. Spend With Your Income in Mind
It can be tough to get through the holidays with your regular budget intact when you are trying to keep up with friends and family with much larger incomes.
One option to overcome the problem is to have a gentle and frank discussion with the people you are expected to buy for. Maybe there is a solution that could ease the financial burden without putting a damper on the celebration.
Extended families with numerous young children may choose to have a holiday drawing where each child buys a gift for one other child. So, instead of purchasing 12 gifts for your nieces and nephews, each of your two children would draw a cousin’s name. That way, each family is responsible for buying only a few gifts and each child gets to give and receive a gift.
5. Understand Your Gift-Giving Style
If you love to spend on lavish gifts for your loved ones during the holidays but do not have a lot of extra money, you could find yourself deep in debt and resenting your decisions after the celebrations end.
It may help to focus on the person you are shopping for. What do they want? Maybe instead of buying an expensive necklace for your sister, you could offer to keep her kids for the night while she goes to a movie with her partner. Buy a gift card to the theater and attach a note offering your babysitting services. There are a lot of ways to show your love and appreciation for someone without setting yourself up for financial struggles later on.
6. Start Planning for Next Year Now
It may be easier to set aside $25 per week throughout the year than it is to come up with an extra $1,100 during the month of December.
Check with your bank or credit union to see if they offer a holiday savings account that automatically transfers an amount of your choosing to a separate saving account each week. Holiday accounts typically release funds during the first week of November, so you have plenty of time to get your shopping done, without going into debt.
Figure out how much holiday spending money you would like to have at your disposal, and set up a savings account to help you reach that goal.
There are many ways to save money during the holidays. Even if you chose just one money-saving habit to implement this year, you will be well on your way to a more financially stable holiday season.