Credit cards provide business owners with the freedom and rewards to spend more and earn rewards, but managing multiple cards from different issuers can become cumbersome and challenging.
Are You Missing Out on Sign-up Bonuses, Retail Loyalty Perks and Travel Benefits from your Current Issuer? So when does switching business card issuers make sense?
1. Interest rates
An LLC business credit card can help separate its financial activities from those of its founders and make tax time much simpler. Unfortunately, some business credit cards come with high interest rates that could adversely impact both personal and business credit histories; plus they might come with foreign transaction fees that add up over time. It makes sense to compare different cards to find one with the best value proposition for your LLC; switching might even qualify you for an attractive introductory rate!
2. Fees
Corporate credit cards provide businesses processing millions in revenue with simplified financial management solutions. Usually requiring their Employer Identification Number (EIN), these cards allow businesses to set spending limits for individual cardholders as well as earn rewards – they typically don’t allow employees to earn rewards but do allow spending restrictions and offer other advantages over comparable small business credit cards that also charge additional-cardholder fees.
The payments industry features an intricate pricing structure, and transaction fees vary based on payment method. A portion of each debit and credit card transaction fee goes to issuers while Visa/Mastercard receive a smaller slice; any remaining fees pass along to acquirers/payment service providers who may add their own markup as well as those from card networks and stakeholders.
By keeping work and personal transactions separate, switching to a business credit card could help lower your credit utilization ratio and raise your personal score while making tax time simpler by simplifying deductions.
3. Rewards
Businesses credit cards allow cardholders to keep their work and personal finances separate, which makes tax time simpler while potentially improving one’s credit score by decreasing overall utilization ratios. Business credit cards typically offer more comprehensive business-centric rewards than personal cards, including such benefits as employee cards at no cost, sign-up bonuses, retail loyalty perks or travel offers. Switching business cards may be worthwhile if they provide more rewarding opportunities, or allow more oversight over employee spending or have outgrown the capabilities of your current card issuer. When making this decision, be mindful of overall financial management goals and plans so you can transition at a time convenient to your company.