Guest Post: Paper or Plastic? The Pros and Cons of Business Credit Cards

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With constant talk of mounting government debt, student loan debt soaring to higher rates than ever before, and fear of an overall failing economy, credit cards are not necessarily the most desirable thing to boost financial security right now. However, there are a number of advantages business credit cards can offer small business owners in today's economy. Of course, there are several facets to of credit building that business owners and professionals need to consider before switching to plastic. As with all business decisions, professionals should examine all aspects of using credit to facilitate their business needs before opening a business credit card.

Business credit cards can be a useful tool for small business at any stage of their development. As any business owner knows, financial flexibility can be one of the most important things when it comes to running a business successfully. There are times that spending exceeds earning and your budget as a business can vary greatly from one month to another. Business credit cards are a convenient way to quickly access financing for short-term needs, while also increasing your company's spending ability. But, of course, credit use as a small company must be very carefully managed. To decide if a small business credit card might be the right option for you and your business explore these pros and cons.

The Pros

There are many reasons business credit cards may be a great option for small business owners:

1. Convenience: Credit cards offer the business owner immediate access to funds and financing for purchases or cash withdrawal. With the business world being particularly unpredictable, this immediacy and ease can be extremely important. While making hasty decisions concerning spending is not advised, sometimes business owners need to act on their feet and be prepared.

2. Online access: As our world becomes more and more mobile, online accessibility has become ever more essential. Many businesses use online vendors and suppliers to meet their business needs. These online purchases can be made more easily using a business credit card.

3. Bookkeeping assistance: One advantage to using credit that many small business owners rarely consider is the bookkeeping guidance cards can provide. Cardholders not only receive monthly statements detailing their purchases, but many cards provide online tools to help manage accounts and keep track of spending. These tools can be extremely useful with maneuvering taxes, audits, and employee spending.

4. Incentives and rewards: One of the biggest perks that business credit cards can offer are incentives and rewards to their users. Business owners choose cards that provide cash back rewards, airline discounts, accommodation discounts, no fee offers, and much more. These incentives can make a huge different for small businesses that do a lot of spending in order to properly operate and thrive. When choosing a business credit card, consider what type of reward program might be most useful for you and your business. If you do a lot of business travel, consider an airline reward business credit card. These programs can help you save a lot of money in the long run, if you choose them wisely.

The Cons

As with anything, there are two sides to opening a business credit card. Before rushing out and opening the first line of business credit you find, consider these potential downsides:

1. Security issues:

Owning a business credit card (or any credit card) boils down to use it carefully. Business owners should carefully monitor their accounts and regularly check on the security of their finances. Credit cards open individuals and businesses up to some security threats that are worrisome. If cards or card information is compromised, malicious individuals can wreak havoc on your business and finances. With careful monitoring and diligent security measures in place, credit card safety can be found.

2. Finicky interest rates: Interest rates are likely the biggest worry involved with credit card use. Unlike a loan or fixed line of credit, a credit card company can change the interest rate on your card. This fluctuation may be in your favor or not.

3. Sometimes pricey: Because business credit cards offer so much ease and convenience to their users, they can be more expensive than other credit cards. While this is not always the case, many business credit card issuers will charge a higher interest rate than a bank or fixed line of credit. That higher interest rate can become a problem if business owners do not pay back their credit on time or in full each statement.

Eliza Morgan is a full time freelance writer and blogger. She specializes in writing about business credit cardsand other business related topics. If you have any questions email her at elizamorgan856@gmail.com.