A regular cash flow is the primary requirement of any business. It is required as working capital and for other purposes for a smooth running of the business.
A business owner having surplus liquid funds can adapt to the changing market conditions, fulfill immediate cash requirements, and make smart investments for the future growth of the business.
Credit cards are the most convenient way of procuring funds for individuals and businesses alike.
Having a business credit card that is separate from your personal credit card can help the business owner differentiate between business and personal expenses and streamline the business expenses.
According to surveys, more than 65% of small businesses use a business credit card for their business expenses, and this number is rising.
Business credit cards can have several advantages and can help grow the business. Let us see how.
What is a Business Credit Card?
A business card is similar to a personal credit card and is used for business expenses. An owner of a sole-proprietorship firm and the partners of a partnership firm, and self-employed professionals can apply for a business credit card. The business card gives exclusive offers, reward points, and other benefits to the card-holding businessmen.
Top 5 Advantages of Using a Business Credit Card
A business credit card helps manage the business expenses without any hiccups. The advantages of credit cards for business are:
- Easier cash flow: A popular saying among businessmen is that you need to spend money to earn money. But to spend money, you need money. Business credit cards offer a line of credit that business owners can use to purchase raw materials, supplies, equipment, etc., for the business. Cardholders can finance purchases easily with the help of a business credit card. Managing these expenses can be tough without a business credit card. Businessmen can also use this line of credit to fulfil sudden orders by making purchases that are beyond routine expenses.
- Reward programs: Business cards offer various rewards to the cardholders on every purchase made using the business credit card. Even if the firm’s employees use the card for purchases, the rewards are still added. There are reward points for different transactions like using the card at airlines, hotels, resorts, etc.
- Manage employee expenses: Employees may make business expenses on their personal credit cards. However, tracking these expenses can be a tedious job for the employer. Instead, the employer can give employees a business card for business expenses and receive a consolidated bill with his spending and that of his employees every month. The employer can set spending limits or even freeze the card if needed. It gives him more control over the business spending of his employees.
- Airport lounge access: Business credit cards offer complimentary airport lounge access. This offer varies from card to card. Some business cards offer this facility at all Visa-affiliated lounges across the country. The cardholder can enjoy benefits like free Wi-Fi, widescreen TVs, comfortable seating, newspapers and magazines, and special meals at the lounge.
- Fuel and Railway surcharge waiver: Business credit cardholders get a 1% waiver on transaction fuel surcharge up to a limit. Cardholders can save a 1.8% surcharge on online railway booking transactions and a 2.5% surcharge on counter booking transactions at Indian Railways.
Eligibility Criteria for a Business Credit Card
- The business card facility is extended only to self-employed individuals, sole proprietors, and partners of a partnership firm.
- The primary cardholder for a business credit card should be between 21 and 65 years.
- The individual must be an Indian resident.
- The credit card applicant should pay a minimum Income Tax Return of Rs. 4.8 lakhs per annum.
- The applicant can apply for a business credit card at all credit card sourcing locations.
Enhanced security for a Business Credit Card
The business credit card comes with an enhanced security feature. A business card comes with an embedded EMV chip that gives an additional layer of security. It also features a 6-digit PIN authentication to make business credit card transactions more secure.
How to apply online for a Business Credit Card
To apply online for a business credit card:
- Visit the official website of the bank and go to the credit card section.
- Select the business credit card option and carefully read all the features and benefits of the card.
- Understand the documents required, charges applicable, and the eligibility criteria for the business credit card.
- Click on ‘Apply Now’ and fill in all the required details in the credit card application form.
- Submit the form and all the documents necessary for credit card approval. These documents include the KYC documents, PAN card, income proof, etc.
- The applicant can keep a track of his application on the website of the card issuer.
- If the applicant meets the eligibility criteria and his documents pass the verification process, the issuer will approve his credit card.
Business credit cards help business owners meet urgent cash requirements to run the business. They are loaded with additional features and benefits for the cardholder and come with unique security features for the customer.
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