What Are Small Business Credit Cards?

Small business credit cards are charge cards that provide a business with a revolving line of credit.  Credit cards allow quick access to financing for purchases or cash advances.  This financing is counterbalanced by a comparatively high rate of interest that becomes payable if the amount owed isn’t fully repaid within the billing cycle.  Like all credit cards, small business credit cards have a credit limit which caps the total amount of money that can be spent before the balance must be paid down.

What Are The Benefits Of Small Business Credit Cards?

Ease Of Access

Small business credit cards allow a company to easily access financing without requiring collateral which is typically necessary for loans and lines of credit.  

Credit Building

Since credit card use affects a company’s credit rating, remaining within the credit limit and paying off the balances in full within each business cycle will result in a better credit score.

Cash Flow

Small business credit cards can provide a financial buffer when the company’s cash flow is limited.

Simplify Bookkeeping

Monthly statements from small business credit cards can simplify the company’s bookkeeping processes.

Usage Rewards

Many credit cards provide rewards points upon use which can result in airline miles, hotel rooms, cashback bonuses and a wide range of other perks.

What Are The Drawbacks Of Small Business Credit Cards?

High Interest Rates

If a credit card balance is not paid in full by the due date, the company will be charged an interest rate that is much higher than typically charged on loans or lines of credit.

Floating Interest Rates

Unlike loans or lines of credit where the interest rate is fixed upon issue, credit card companies have the ability to change their interest rates at any time.

Penalties For Overspending

If the balance owing on a small business credit card exceeds its credit limit, the company will have to pay a penalty and may have the card revoked.

Fraudulent Activity

Because credit cards afford virtually unlimited purchasing and cash withdrawal opportunities, they can be abused by unscrupulous employees or thieves.  

Personal Liability

Although credit cards do not require collateral during the application process, most small business credit cards require a statement of personal liability in the case of unpaid balances.

Image credit:


See it for yourself

Try our fully functioning demo account and see if Emburse is the right fit for you.