The Motley Fool
Published Apr 20, 2019 10:09
Updated Apr 20, 2019 10:36
Which should it be, a personal or business credit card? They operate in much the same way, but your choice could make the world of difference if you are a sole trader, start-up business or someone who makes purchases for a larger company.
If you are at the crunch point of deciding whether to take out a business credit card, it’s time to consider the pros and cons.
Pros of business credit cards Firstly, do you run a business or make purchases for the company you work for? If so, you are likely to find a business credit card useful.
A business credit card operates in much the same way as a personal credit card, with APRs, credit limits and minimum monthly payments, but the credit card account is in your company name not your own.
So what is the upside to having a business credit card?
You could look to simply have a debit card attached to a business current account. The main difference with this is obviously that your bank would not be lending you any money, so whatever you spend on your card you need to have in your account.
Alternatively, you could look at a business charge card. This is a card with which you can make purchases, but you will need to pay your balance in full each month. A charge card can help with the cashflow issue and removes the potential for interest rate charges, but it does mean you cannot carry a balance over. If you fail to pay your balance in full each month, you will be subject to late payment fees, and missed payments can negatively impact your credit score.
Ready to find the credit card that’s right for your business? A great place to start is our list of the top business credit card offers .
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Motley Fool UK 2019
First published on The Motley Fool
Written By: The Motley Fool
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