Credit cards are fast becoming a business necessity. They're flexible, easy to use, convenient and offer users the ability to make purchases instantly, anywhere in the world.We've spent some time analysing credit cards aimed at businesses and have put together a list of our top 8 reasons to use a company credit card.
Easy tracking of expenses and purchases - Using a credit card for business purchases makes it easier to track expenses. The majority of credit card providers offer comprehensive expense reporting (both online and off) which can save you countless administration costs and a lot of hassle.
Cash-back programs. If you sign up for the right card, you can earn anywhere from 1% to 5% back on your purchases.
Frequent-flier miles. Virtually every airline has at least one credit card. Cardholders can rack up frequent-flier miles at varying rates. Many offer a substantial signup bonus to get you started on your way to a free airline ticket.
Points for whatever. Many card rewards work on a point system where you earn points per dollar spent. When you reach a certain point threshold, you can redeem your points for gifts, travel, hotels, or something from their catalog.
Safety. Paying with a credit card can make it easier to avoid fraud. When your debit card is used fraudulently, the money is missing from your account instantly and it may take a while to get it back. Any scheduled payments or checks may bounce, causing NSFs and making your creditors (and you) very unhappy.
If your credit card is used fraudulently, you won't be out any cash. You just notify your credit card company of the fraud and the credit card company resolves it.
Holding on to cash. When you make a purchase with your debit card, your money is gone instantly. When you make a credit card purchase, your money stays in your checking account until you pay your credit card bill (hopefully in full). There are two advantages:
- If you pay your credit card from an interest-bearing checking account and earn interest on your money during the grace period, the extra interest is yours to keep.
- When you pay with your card, you don't have to watch your bank account every day to make sure you're not overdrawn.
Insurance. Most credit cards automatically come with a host of consumer protections that you may not realize you have, such as rental car insurance, travel insurance, and product warranties that may exceed the manufacturer's warranty.
Easier acceptance. Despite television and radio guru claims, certain purchases ARE more difficult to make with a debit card. Try renting a car or booking a hotel room and you'll almost always have an easier time with a credit card.
Rental car and hotel companies prefer credit cards because it's easier to charge customers for damage to a car or a room with a credit card. Using a debit card may result in the company putting a hold of several hundred dollars against your checking account to cover those just-in-case events.
Also, when you're traveling in a foreign country, many merchants won't accept your debit card, even when it has a bank or credit card company logo on it.
Building credit. If you're trying to improve your credit score, using a credit card responsibly will help because credit issuers report your payment activity to the credit bureaus. Debit card use doesn't appear anywhere on your credit report.
Not everything is rainbows, unicorns, butterflies and sunshine in credit card land. There's the potential for late fees and other fees, and also interest charges if you don't pay your balance in full each month. Many of us abuse them and end up in high-interest debt, then fight for years to get out of it.
But if you can manage yourself and use your card responsibly -- i.e., like an adult! -- there are a lot of benefits to using your credit card.
Source: http://money.msn.com
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