What are Business Credit Cards?
If you thought that corporate credit cards are the same old wine in a new bottle, you may be in for some surprise. These are cards designed to meet the ever changing needs of a business enterprise. The features and benefits vary from one provider to another. In essence these cards differ from the normal credit cards in the type of benefits they offer. They come loaded with highly lucrative reward schemes and features that encompass varied financial needs.
Features of Business Credit Cards:
The features of the business credit card differ from one card provider to another. The general features are enlisted here:
Regular interest rate ranges from 2.5%to 3% per month.
Facilities like 0% fuel surcharge are available.
These cards are accepted globally
Revolving credit system is offered by some of the card providers.
Benefits of Corporate Credit Cards:
The following benefits are usually offered by most of the business credit card providers.
- The money spent in buying your office furniture, computer peripherals, stationery, etc. can be done smartly using these cards.
- Expenditure towards air tickets, business needs, corporate gifts, restaurant bills will fetch you reward points and great discounts.
- This card can be used for paying your utility bills
- Most of the service providers waive-off the joining and renewal charges.
There could be certain terms and conditions for the type of card that a particular business is eligible for. For example, there could be a minimum turnover condition that some of the providers insist on.
Tracking Business Card Expenses:-
With all the given benefits and features, tracking your expenses becomes mandatory as with all other cards. In fact, such a monitoring is enabled by the card providers themselves. You can monitor the payments made and manage expenditure of your personal business enterprises through the Internet also. This facility is known as MIS.
Business expenses as also the interest on your business credit card are tax deductible. When an audit is conducted, you must produce proper bills on the purchases that were made for business purposes. Here are a few pointers that will help you track your corporate card expenses.
- The foremost step in tracking these expenses begin with saving receipts.
- Enter the expenses in your book of accounts regularly.
- Make additional copies of important records and bills.
- Be prepared to face the tax season without getting stressed out.
Pitfalls of Business Credit Cards
It is very important to use business cards with prudence. Expenses should be kept within limits as card loans are more expensive than bank loans. If expenses are not monitored, the business is likely to fall into a debt trap which will reflect badly on the creditability of the business house and lead to its downfall.
Contributed By: Aruna Sharma |
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Mrs. Sharma holds a Masters in Financial Management from University of Mumbai. She has graduated from the University of Mumbai. | |
