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.
How to Save Money Each Month
With COVID-19 ravaging the economy and millions of Americans out of work, it’s little wonder why so many of us are worried about our finances. Sure, government stimulus checks and unemployment insurance help, but they often don’t do enough to replace our whole salary.
Even folks with secure jobs are starting to tighten their belts. After all, the future looks anything but secure. It’s best to act now and top up your savings rather than waiting until it’s too late.
Another reason why it’s the perfect time to take a closer look at your personal finances and learn how to save money each month is because many people now have a little extra time on their hands. Rather than firing up Netflix for the 40th time, take this opportunity to save a little cash.
Let’s take a closer look at a few different ways you can easily save a few bucks. Implement all these tips and you might end up saving a thousand dollars – or more – each month going forward!
Groceries
Most of us should focus on their big three expenses, which are food, transportation and housing. That’s where most savings will come from.
Let’s start with food. Many people are already off to a good start in this department by making more meals at home. This tip alone can easily save a family a few hundred dollars each month, depending on how often they end up picking up takeout.
But it isn’t just enough to go to the grocery store. I know I’ve often walked out of my local supermarket with ingredients that cost about as much as a restaurant meal.
The secret to saving big money grocery shopping is to stick to your local grocer’s loss leaders. These are items the company prices at less than their cost to get people in the door. The hope is customers buy enough to make up for the loss on a few cheap items.
Your goal should be ensuring the grocery store only makes a minimum profit off you. Ideally, you’ll want the store to lose money every time you walk in. Repeat this process at every grocery store within a reasonable drive.
To really save money on groceries will take a whole new mindset. Many people plan their meals for the week and then start making a grocery list. You’ll want to turn this process around, and meal plan based on what the store has on sale.
Say the big deal this week is on chicken breasts. You can make several different meals using this protein. Switching it up is important, or else you’ll get bored and end up with pizza delivery.
Finally, talk to the staff while you’re shopping. Ask if they have any interesting deals this week. Sometimes a store will be clearing out an item for pennies on the dollar.
Transportation
Many people aren’t going to feel comfortable using public transit for a very long time, which means you’ll need to find ways to save money on your car.
An easy tip today is to simply call your insurance company and request a new quote based on the smaller number of miles driven. Savings of $50 or $100 per month using this strategy aren’t uncommon.
I’d recommend taking this a step further and shopping your car insurance to multiple different companies each year. The last time I did this I saved close to $250 on both mine and my wife’s car.
Fuel is relatively cheap right now, so that’s a plus. Good driving habits can also help keep your fuel costs down. Make sure your tires are at the right pressure and don’t speed. You’ll gain a little fuel economy that way, which can really add up if you put on a lot of miles.
Housing Costs
Whether you rent or have a mortgage, there are steps you can take to reduce the cost of housing.
If you don’t own, it’s time to ask your landlord for a reduction in rent. It never hurts to ask, right? If the answer is no, keep an eye on local vacancies that might be offered for less.
It’ll take more work to save on your monthly housing costs if you own a house, but it’ll likely be worth it. Mortgage rates are dirt cheap right now, thanks to low interest rates in place to help boost the economy. Refinancing can easily cut thousands of dollars in interest costs off a 15 or 30-year loan. Crunch the numbers; you might be pleasantly surprised.
There are also some interesting ways to save inside your home as well. The easiest utility to save money on is your internet package. Call up your provider and threaten to leave unless you get a better rate. Depending on how expensive your internet is today, a savings of $50 or even $100 per month is possible.
Next, if applicable, do the same thing for your cable TV package and home phone. Perhaps take a closer look at bundling those services if possible.
Don’t just stop there. The next step is to research lower cost cell phone plans. This avenue is especially promising if your phone is more than a couple years old. Resist the temptation to upgrade, especially if your phone still works fine.
Like with car insurance, today is a great time to look at switching home insurance providers. Again, look at bundling options. Many insurers give a deal if you have multiple policies with the same company.
Pay Off Debt
For many people, consumer debt takes a big bite of their disposable income. An uncertain economy can provide great motivation to get your personal balance sheet under control.
Getting rid of debt isn’t just about the interest saved each month. It also frees up precious cash flow that can be reallocated to other uses.
Say you owe $10,000 on a credit card and you’re paying $500 per month towards it. The interest rate is 1.5% each month, or $150. You’re only saving $150 per month by paying this debt off completely, yet you’ll free up $500. That cash can be used in any number of different ways.
How to Save Money Each Month: The Bottom Line
Jobs are uncertain, especially right now. But you can control your spending.
Today is the perfect time to take a serious look at your finances and make a few cuts. It doesn’t even have to include much sacrifice, either. Many of these savings are completely painless, and most aren’t really big changes. Chances are, the steps for how to save money each month will be easier to implement than you think.
Any sacrifice will be worth it, especially if you’re in a tight spot. It’s empowering to take control of your financial future, even if you can’t control your own career destiny.