On the Road to Building Business Credit

Congratulations are in order. My application for a corporate credit card was approved today. I'm officially beginning to take my company on its journey toward establishing good business credit.

But why a corporate card? And would my business need its own credit anyway?

Benefits of a Corporate Card

Business credit cards come in a range of exciting packages, some with travel rewards, some with rebates.

Many of the transactions I need for running my business can be done online, and my bank has included a business ATM/debit card for that convenience. If I use a business credit card to pay them, however, I can get the line-item detail I need for accurate record-keeping, plus leverage my regular spending into bonuses like free hotel stays or gift cards at office supply stores.

Today, my business is small enough that I can easily keep track of work-related purchases versus personal ones, but I have my sights set on growing. By having separate bank accounts and a separate business credit card, I can not only more easily monitor my business's finances, but I can also begin to point my business toward future expansion.

The Need for Business Credit

Someday I want to have an office, as opposed to working from my home. At that point my company will have to sign a lease, which may require a credit check. Then, I will have to purchase additional computers and workstations. Regardless of whether I choose to finance that purchase with a bank loan or a credit card, being able to access growth funds will be important. I might find better terms and even lower prices fromvendors if my company has a good business credit rating, too.

Business Credit Card Options

I searched for "best business credit cards" to seek side-by-side comparisons of various business credit card offers. One of the top search results on Google was a very useful article from Smart Money: "Five Things to Know About Small Business Plastic."

Because I'm just getting established, I opted for a card with a low APR ~ just in case I choose not to pay the entire balance each month. It was also possible to find that feature combined with rewards. The Advanta MasterCard, chosen by Smart Money as the best business credit card, offers business owners the choice between a Cash Bank rewards program or a point-for-dollar travel awards program.

Although an American Express rewards program was also very highly recommended, I've been in too many situations where AmEx isn't accepted as payment. I made the choice that would provide me the most flexibility with the least cost and called Advanta.

Before I applied for the card, I wanted to be sure that they would be reporting my business's performance to a business credit bureau. The customer service agent confirmed that they would, and in less than five minutes, my business was approved.

Now, does celebratory champagne count as a business expense?