As an individual, we have all been tempted to take a credit card even tough we are happy spending cash. Because, there are rewards like cash backs, reward points and discounts attached to it. When it comes to dealing with a business, the banks play a similar game. They offer you business credit cards with rewards. What are these cards? What kind of reward is possible on these cards? How does one take advantage of them? Is it worth taking the credit card? Yes, these are the questions that plague the business owners and the banks give it their best trying to convince them. These are simply credit cards, with rewards that are more suitable to a business rather than individuals. The following are the advantages and disadvantages of making the choice in favour of the bank:
- It is available for any kind of business and does not discriminate by the size. Even if you are an individual running a freelance form of business, you can still opt for it.
- It gives you the spending power for your business needs without worry. When you have an urgent requirement, you know that you can have extra time to arrange for the funds.
- With money spent on credit, you can earn interest on the money which is still in the bank.
- The rewards on business credit cards are generally in categories like airfare, advertising, office supplies and petrol.
- The more you spend, the better are the rewards. You collect points on your card and then you can redeem these points for exclusive offers.
- Some of the rewards included fee waiver, bonus points to be spent on your business services such as software, courier services, printing supplies.
- You can collect airmiles on regular flights which can earn you free tickets or free upgrades depending on your frequency of travel. This is an advantage because, all your tickets when booked on the same card accumulates miles much faster.
- Your advertising spend gets you bonus points to be spent on free advertising slots. These could be social medial advertising, television or radio advertising and even advertising in the print media.
- It requires a personal guarantee from the investor
- When you have a business credit card, you are tempted to spend without being sure that you will be able to get enough revenue to be able to pay the credit card bill.
- The interest rates and penalty charges for these cards are high.
- In the case of business credit cards with rewards, it is difficult to keep track of the reward points and they just might expire without you being able to take advantage.
- A business credit card stands the risk of misuse by employees. If they are using it where the card can earn reward points, it is still ok, but if they start using the credit card for personal grocery shopping or a visit to the hair dressers, it will not earn any reward points.
The advantages of having a business credit card with rewards are more in number as compared to the disadvantages but the seriousness of consequences in case of failure of payment require you to exercise caution, when spending. The rewards help you to save a lot of money and at the same time, interest accumulates on the bank deposits. The rewards are a bonus for the company and should be used wisely and within the prescribed time limit for the best advantages. Keep your eyes and ears open for extra benefits on your credit card as there are a lot of flash offers available on online shopping, airlines booking as well as hotel accommodation.