Managing spending is crucial for freelancers, small businesses, start-up founders, and employees in growing companies. Business credit cards allow spending management for business-related expenses with added features unavailable with normal personal cards. In this article, we will look at the definition, benefits, guidelines for use, and frequently asked questions about business credit cards in India.
Understanding business credit cards
A business credit card is one type of credit facility that is provided specifically for business related expenses. Business credit cards are used to keep business funds separate from personal usage so they can organise daily activity including employee expenses, software or digital subscriptions, office supplies, travel booking, and vendor payment.
Note: Readers are advised to check the relevant bank’s website for the latest updates as interest rates, fees & charges are subjected to change.
Is it okay to use a business credit card for personal use?
It is technically possible but extremely discouraged. When you mix personal and business expenses with a business credit card it will make it difficult to distinguish between personal and company transactions:
- When it is time to do your tax return.
- It creates discrepancies with bookkeeping.
- It may also be against their card issuer’s policy.
- It could adversely affect your company’s credit rating.
If you mix spends, this could result in fines or lost deductions if you are audited – it is best to maintain financial stricter rules and only use personal credit cards for purchases.
In conclusion, business credit cards are a way to grow, manage, and gain visibility in business! You can increase cash flow, reduce payment hassle, and solidify the financial base for your business by picking the right card, and using it wisely.
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