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 Use PayPal
Did you just sign up for a PayPal account and you are wondering how to use it? In this article we will look at how to use PayPal, why people use it, the features PayPal offers and the pros and cons of this service.
What is PayPal?
It is a payment system offered online and on your mobile device that makes sending and receiving money online easy, safe and secure worldwide. You can fund your account in several ways, including your bank account, credit card and debit card. You can use it to purchase goods and services from retailers from around the world. You can also send money to friends and family around the world too.
PayPal serves as an intermediary. It acts as the middleperson between banks and merchants, transferring funds in a secure and timely manner.
Why Do People Use It?
There are many reasons people use PayPal.
First of all, it is a secure way to send money online. If you use your credit card or debit card to buy goods or services on the web, retailers are sometimes able to access your payment information. This system adds more protection by making sure that retailers are never able to view your sensitive data. It also keeps your personal and financial information secure by using several tried-and-true methods, including two-factor authentication, end-to-end data encryption and email confirmation for transactions.
PayPal is also widely accepted throughout the world. You can use this system to buy goods and services at millions of stores worldwide. For anyone without a credit card or who does not feel comfortable using their credit card to make an online purchase, PayPal can be a great solution. You can send payments without worrying about providing your credit card information to a retailer you are not familiar with.
The Features PayPal Offers
PayPal offers many features that make it unique.
Based on your IP address, it can determine your location once you login to your account. Using cookies and your web browsing history, it is able to help detect if it is really you logging in.
You can easily move money from your PayPal account to your bank account and vice-versa. It typically takes only three to five business days for this to happen. This helps you move money where you want it and when you want it.
Similar to credit cards, it offers users protection when you are buying something online. Let’s say you buy something online, but when you receive it it is different than what you expected, or the item does not arrive at all. In instances like this, PayPal lets you open a dispute. You can open a dispute in its resolution center. This leaves the onus on the seller to prove that you got what you paid for. Otherwise, PayPal will return your money to you.
The Pros and Cons of PayPal
Here are some of the pros and cons of using this system.
Pros
- Simple: It is straightforward and easy to use. You can send money to family or friends in a matter of minutes. This is often a lot faster than the banks.
- Family and friends: PayPal allows you to send money to family and friends without incurring any fees. This differs from banks, which like to nickel and dime you on everything.
- Encryption: It encrypts your bank and credit card information, helping keep it safe and secure.
Cons
- PayPal fees: PayPal charges you fees to send and receive money for business transactions. This can really add up over time, especially as a small business owner. You could end up paying hundreds or thousands in PayPal fees.
- Account freeze: It’s possible that your account could get frozen. If this happens, it can be a lengthy process to unfreeze.
Step-by-Step Guide on How to Use PayPal
Here are the steps to send money to someone you know using PayPal.
- Visit the PayPal website and login using your email address and password unique to PayPal.
- Once logged in, from the main page choose “pay or send money.” Choose that you are sending money to a family member or friend.
- Enter the email address or phone number of the friend or family member you are sending the money to. For convenience, you will see accounts listed that you often send money to.
- Choose the amount of money that you would like to send, as well as in what currency. You can add a note. For example, you can write that it is for someone’s birthday or to split the rent.
- Choose where the money is coming from. It can be from your bank account, credit card or debit card.
- Click the button to send money now, and that is it. Your money has been sent. It’s that easy!