7 Ways to Leverage Business Credit Cards for Growth

Business credit cards can be a powerful tool when scaling your company.

Malcolm Hong Dec 8, 2020

As a small business owner, access to capital is critical to the success of your business.  

Business credit cards are a flexible way for you to access credit and can be particularly valuable during tough economic times. In a recession, having extra credit provides a financial cushion that could make the difference between the success or failure of your business.

Gina Bessire, manager of Zions Bank’s Idaho Business Resource Center and certified credit educator and coach through Credit Builders Alliance, shares 7 tips for how business owners can leverage business credit cards to their full advantage.

Business credit card tip #1: Build a business credit history

Credit card issuers check your personal credit score when you apply for your first business credit card, but after approval, your business credit score will be separate from your personal credit line.

“Having a strong business credit score is an invaluable asset for a business,” explains Bessire. “Strong business credit can make it easier to obtain loans, lines of credit, commercial insurance, lease space and equipment — particularly at affordable rates and premiums.” 

After opening your first business credit card, making payments on time and keeping a healthy credit utilization will help build your score.

“Business expenses can rack up quickly, so it’s important to keep your spending under control,” said Bessire. “Keeping your balance less than 30% of your credit card limit will make a positive impact in building your score.” 

Business credit card tip #2: Leverage cheap financing through credit card promotions

Every business can benefit from saving money when the opportunity presents itself. Because business credit cards often have promotional pricing, this can be a useful option to consider.

“Many business credit cards come with a 0% APR introductory offer. If you can pay your bill in full before the introductory period ends, your business credit card essentially becomes an interest-free loan,” said Bessire.

Business credit card tip #3: Use business credit cards to improve your cash flow

Managing cash flow is one of the most important factors that influence your business. Your business can run up expenses that need to be addressed, even if you haven’t been paid yet for your goods or services.

Business credit cards can be a valuable resource to bridge the gap between expenses and income.

business credit card in a card reader

“Let’s consider a scenario in where you own a retail business and need to replenish your inventory,” says Bessire. “If you don’t have terms with your vendors, paying with a credit card typically gives you an extra 20 days to make payment.”  

Aside from the difference it makes to cashflow, using a business credit card could also give you more negotiating power.

“Many vendors are willing to give a discount to customers who pay in a certain timeframe, often the first 10 days. Paying with a business credit card could allow you to receive this discount and still have enough time to make repayment,” Bessire explains.

Business credit card tip #4: Use business credit cards to better organize business finances

If you have a credit card exclusively used for business, it’s easier to keep track of deductible expenses and consolidate your spending. Some cards, such as the Zions Bank Amazing Rewards® Business Credit Card*, also provide helpful features that can streamline your payment and reconciliation process.

“For a business owner, saving time is just as essential as saving money,” Bessire says. “Many credit card companies categorize and add up your expenditures. When it’s time to file your taxes, you’ll be grateful to have your spending history in one place.”

Business credit card tip #5: Use business credit cards to make it easier to identify and resolve fraud

Because credit cards leave a paper trail that shows your spending history, using a business credit card makes it easier to spot fraudulent charges or employee misuse. Additionally, there are policies that can help safeguard your business if fraud takes place.

“Entrepreneurs benefit from reducing their risk profile, which is why business credit cards are a valuable tool,” Bessire says. “Many credit card companies offer zero liability for fraudulent charges. This means that if an unauthorized person used your business credit card, you can dispute these charges and receive credit back during the investigation.”

Business credit card tip #6: Simplify spending for your employees with business credit cards

Business credit cards simplify spending for your employees and allow you to have more control over how a company’s funds are spent.

“From an employee’s perspective, access to a company card can help them avoid a lot of hassle. Many employees dislike using personal funds to pay for work expenses and then filling out expense reports and waiting for reimbursement,” Bessire says.  

From a company’s perspective, there are also benefits from providing company cards to employees.

“Business credit cards usually have built-in controls to help employees spend responsibly,” Bessire explains.  “For example, you can set spending limits, spending categories or alerts for your employee cards. Having a paper record of employee spending also makes it easier to safeguard against internal fraud.” 

Business credit card tip #7: Obtain better perks and rewards

Compared to personal credit cards, business credit cards tend to offer larger credit limits and greater rewards. These rewards can add up over time — especially if you make regular purchases on a business credit card with select spending categories. Additionally, some business credit cards might even offer sign-up bonuses that could be used to help bootstrap your business.

“To grow your business, it’s essential to leverage your capital as much as possible,” says Bessire. “For instance, let’s consider a scenario in which your small business spends $100,000 a year on business travel. If you paid for these charges with a credit card that provides 2% cash back  in this category, you’d receive $2,000 in free money annually.”   

Although it might sound tempting to max out your business credit card to obtain rewards, Bessire offers a word of caution: “Don’t accumulate monthly credit card debt chasing after rewards. If you’re carrying a credit card balance that accrues interest, it’s unlikely your rewards will be able to offset your overall costs.”  

You can find out which Zions Bank card fits your business by using our credit card comparison tool, or visit your local Zions Bank branch for more information.

*Credit cards are subject to credit approval. Terms, conditions and restrictions apply. See a banker for details.

Malcolm Hong is the Public Relations officer for Zions Bank in Idaho.

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