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Your business credit card can be one of your company’s most powerful tools. But if it isn’t managed correctly, it could be more trouble than it’s worth. When you don’t have a handle on your business credit card, the result can be expensive late fees, higher interest charges and damaged credit. Furthermore, a poorly managed business card account is an invitation for employee abuse.
To avoid facing these and other problems, here are five ways that you can manage your business credit cards like a pro.
1. Choose the right business card for your needs.
Business owners are fortunate enough to enjoy a strong and competitive market for small business credit cards. But to get the most out of your credit card, you have to choose the best one for your needs.
For example, you can use a travel rewards card in order to enjoy valuable perks and benefits while traveling, such as airport lounge access, a free checked bag or priority boarding. You can also use a travel rewards card to earn points and miles that you can use towards future reservations. Alternatively, some small business cardholders will use cash-back rewards to effectively reduce their expenses.
You also need to choose a card that offers you the most rewards for the type of purchases you make. For instance, some cards will offer bonuses for gas, while others will feature additional rewards for purchases from office supply stores.
And, finally, you need to look for a card you’re actually going to get approved for. Business credit card issuers primarily use your personal credit scores to qualify you for a credit card. (You can check your personal and business credit scores for free on Nav.)
2. Have a written policy for employee cards.
If you are going to entrust your employees to be authorized users on your small business credit card, then you have to set boundaries and put them in writing. For example, you can specify that employees must obtain pre-authorization from management before charges beyond a certain amount, and you can clearly forbid personal use of the card.
3. Double check all of your statements.
All credit card users, including those with small business credit cards, should closely examine each charge on their statements. If you are closely tracking each charge, then inaccurate or unauthorized charges can be disputed with the card issuer. Also, employee credit cards can be monitored for compliance with company policies for their use.
4. Utilize your reporting features.
One of the ways that small business credit cards are different from personal cards are the numerous accounting tools and reporting features. For example, American Express small business cards come with the ReceiptMatch feature to help you tag receipts using your desktop or mobile device. American Express also lets you designate an account manager to review statements, make payments and dispute charges. And Capital One’s Spark line of small business credit cards offer quarterly and year-end summaries that help you with planning, budgeting and accounting.
5. Leverage your cardholder benefits.
Business credit cards can offer some valuable benefits, but only when you remember to use them. For example, your credit card can offer you rental car insurance, but only when you decline the optional coverage offered by the car rental company. Other common benefits include extended warranty coverage, damage and theft protection and even price protection coverage. And when traveling, some business credit cards can offer free checked bags, priority service and discounts on in-flight food and entertainment.
To find out what your card offers, contact the card issuer and ask for their guide to benefits. That document will detail the terms and conditions of all of your card’s travel insurance and purchase protection policies.
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This article was originally written on March 27, 2017 and updated on February 1, 2021.
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