As a business owner in California, you understand the importance of managing your finances effectively to stay afloat in one of the most competitive markets in the world. One of the essential tools that can help you achieve this goal is a business credit card. 

Why Get a Business Credit Card

1. Separate Business and Personal Finances
2. Build Your Business Credit Score
3. Earn Rewards and Cashback
4. Improve Cash Flow
5. Convenient for Business Travel

Here are some reasons why you should consider getting one:

1. Separate Business and Personal Finances

Using a business credit card allows you to keep your business expenses separate from your personal expenses. It makes it easier to track your business spending, keep your receipts organized, and simplify your accounting process. This separation can also help you avoid legal and tax issues that may arise when your business and personal finances are mixed.

2. Build Your Business Credit Score

Having a good business credit score is crucial for obtaining financing, securing business loans, and attracting investors. A business credit card can help you build your credit score by showing lenders that you are responsible and can manage credit effectively.

3. Earn Rewards and Cashback

Most business credit cards come with rewards programs that can help you save money on everyday business expenses. These rewards can include cashback, travel points, discounts, and other perks. Choosing the right business credit card can help you earn rewards that align with your business needs and goals.

4. Improve Cash Flow

Business credit cards can provide access to credit when cash flow is tight, allowing you to purchase supplies or equipment that can help grow your business. It can also help you take advantage of early payment discounts or negotiate better payment terms with suppliers.

5. Convenient for Business Travel

If your business requires you to travel frequently, a business credit card can be a convenient payment option. Many cards offer travel benefits such as insurance coverage, airport lounge access, and discounted rates on flights, hotels, and rental cars.

A business credit card is an essential tool for any business owner in California. It can help you manage your finances more efficiently, build your credit score, earn rewards, improve cash flow, and simplify business travel.

Business Credit Cards vs. Personal Credit Cards

As a small business owner in California, you have many financial tools at your disposal to help your business grow and succeed. One of those tools is a credit card, and it’s important to understand the difference between business and personal credit cards.

The Way They’re Used

Personal credit cards are intended for individual use and can be used for personal expenses such as groceries, gas, and dining out. Business credit cards are designed specifically for business use and can be used to cover a variety of expenses such as office supplies, travel expenses, and marketing costs.

They Rely on a Personal Guarantee

While both personal and business credit cards require an application and credit check, business credit cards typically require a personal guarantee. This means that as the owner of the business, you are personally responsible for any debt incurred on the card.

Personal Credit Scores are Key to Getting Approved

When applying for a personal credit card, the credit card company will typically look at your personal credit score and credit history to determine your eligibility. Similarly, when applying for a business credit card, the credit card company will look at both your personal credit score and your business credit score.

Next, let’s cover the major differences between personal and business credit cards.

Which Credit Bureaus Get Your Information

When you use a personal credit card, the activity on that card is reported to the three major credit bureaus: Equifax, Experian, and TransUnion. With a business credit card, the activity is typically reported to commercial credit bureaus such as Dun & Bradstreet, Experian Business, and Equifax Small Business.

The Terms & Fees

Business credit cards may have different terms and fees than personal credit cards. Business credit cards may offer a higher credit limit, longer payment terms, and rewards programs specifically designed for business owners. It’s important to read the terms and conditions carefully before selecting a credit card to ensure that it’s the right fit for your business needs.

How the Debt Can be Collected

If you default on a personal credit card, the creditor may take legal action against you to collect the debt. With a business credit card, the creditor may take legal action against your business, but not necessarily against you personally. However, if you have provided a personal guarantee, then you may be held personally responsible for the debt.

As a small business owner in California, it’s important to understand the differences between personal and business credit cards to determine which option is best for your business needs. Consider your spending habits, credit history, and business goals when deciding on a credit card, and remember to read the terms and conditions carefully before applying.

What to Look for When Comparing Business Credit Cards

As a business owner, you know that having a credit card can be a great tool for managing your expenses and cash flow. But with so many options out there, it can be challenging to determine which card is right for your business. Here are some things to consider when comparing business credit cards in California.

1. Rewards Programs:

Many business credit cards offer rewards programs that allow you to earn points, miles, or cashback on your purchases. Look for a card that offers rewards that are aligned with your business needs. For example, if you travel frequently for work, a card with travel rewards may be more beneficial. If you frequently make purchases at office supply stores, look for a card that offers bonus points for those purchases.

2. Interest Rates:

Interest rates can vary widely between credit cards, so be sure to compare rates and understand how they are calculated. Some cards offer low introductory rates, but those rates may increase significantly after the introductory period. If you plan to carry a balance, look for a card with a low ongoing interest rate.

3. Annual Fees:

Many business credit cards charge an annual fee, which can range from a few hundred dollars to over a thousand dollars. Consider the benefits of the card and weigh them against the annual fee. If the rewards or benefits outweigh the cost, it may be worth paying the fee.

4. Credit Limits:

The credit limit of a business credit card can be a critical factor in managing your business expenses. Make sure the card you choose has a credit limit that is appropriate for your business needs. You don’t want to be stuck with a card that doesn’t provide enough credit to cover your expenses.

5. Additional Perks:

Some business credit cards offer additional perks such as travel insurance, purchase protection, and extended warranties. These perks can provide added value and may be worth considering when choosing a card.

6. Customer Service:

Customer service is an important factor to consider when comparing business credit cards. Look for a card issuer that offers excellent customer service, including a dedicated customer service line for business cardholders.

By taking these factors into account, you can choose the best business credit card for your California-based business. Remember, a credit card can be an essential tool for managing your business finances, but it’s important to use it responsibly and pay off balances in full each month to avoid high-interest charges and fees.

How to Apply for a Small Business Credit Card

As a small business owner in California, having a credit card specifically for your business can be a powerful tool to manage your finances and build credit. But with so many options available, it can be difficult to know where to start when applying for a small business credit card. In this section, we’ll walk you through the steps you need to take to apply for a small business credit card.

1. Check Your Credit Score

Before you apply for a small business credit card, it’s important to know your credit score. This can help you determine which cards you may qualify for and what interest rates and credit limits you can expect. You can check your credit score for free at Nav.

2. Gather Your Business Information

In addition to your personal credit score, credit card issuers will also look at your business’s financial information when evaluating your application. This may include your business’s legal name, address, tax ID number, annual revenue, and number of employees. Have this information readily available when you’re ready to apply.

3. Research Your Options

There are many credit card issuers that offer small business credit cards, each with their own benefits and drawbacks. Research the options available to you, taking into account factors such as interest rates, annual fees, rewards programs, and any special promotions or offers.

4. Choose the Right Card

Once you’ve researched your options, choose the card that best fits the needs of your business. Consider factors such as your business’s spending habits and financial goals, as well as any rewards programs or perks offered by the card.

5. Fill Out the Application

Once you’ve chosen the right card, it’s time to fill out the application. Be sure to provide accurate information and double-check everything before submitting. Some applications may require additional documents, such as bank statements or tax returns, so be prepared to provide these if necessary.

6. Wait for Approval

After you submit your application, the credit card issuer will evaluate your information and determine whether or not to approve your application. This process can take anywhere from a few days to a few weeks, so be patient.

7. Activate Your Card

If your application is approved, you’ll receive your new card in the mail. Follow the instructions provided to activate your card, and then start using it to make purchases for your business.

Applying for a small business credit card can be a great way to manage your business’s finances and build credit. By following these steps, you can increase your chances of being approved for the right card for your business’s needs.

How to Use a Business Credit Card

As a business owner in California, you may have decided to get a business credit card to help manage your expenses and build your credit. Now that you have your card, it’s important to know how to use it effectively. Here are some tips on how to use your business credit card to your advantage:

1. Keep your personal and business expenses separate: One of the key benefits of having a business credit card is the ability to separate your personal and business expenses. Make sure to only use your business credit card for business-related expenses and not for personal use. This will help you keep track of your business expenses and simplify your accounting process.

2. Set up automatic payments: To avoid late fees and interest charges, consider setting up automatic payments for your business credit card. This will ensure that your payments are always on time and help you maintain a good credit score.

3. Monitor your credit utilization: Your credit utilization ratio is the amount of credit you’ve used compared to your credit limit. It’s important to keep your credit utilization below 30% to maintain a good credit score. Consider using your business credit card for regular expenses, such as office supplies or internet bills, and avoid using it for large purchases that may push you over your credit limit.

4. Take advantage of rewards: Many business credit cards offer rewards programs, such as cash back or points for travel. Make sure to read the terms and conditions of your card’s rewards program and take advantage of any opportunities to earn rewards on your business expenses.

5. Keep track of your expenses: Regularly reviewing your credit card statements and expenses can help you stay on top of your budget and identify any potential fraudulent charges. Many business credit cards also offer online tools to help you track your expenses and categorize your spending.

Using your business credit card wisely can help you manage your expenses and build your credit score. By following these tips, you can make the most of your business credit card and take your business to the next level.

How Nav Helps California Small Business Owners

 

If you are a small business owner in California, you know how important it is to stay on top of your finances. One way to do this is by getting a business credit card, which can help you manage your expenses, build your credit, and earn rewards. With Nav, you can easily connect your business data and compare business credit cards from our trusted partners based on qualifying credit score, rewards, APR, annual fee, and sign-up bonus. By using Nav, you can make an informed decision on which business credit card is right for your business and take control of your finances today.