You should have 1 to 3 business credit cards if you own or operate a small business, depending on how many cards you can keep track of without missing due dates or spending more than you can afford to repay. Opening more than 3 business credit card accounts may just make it harder to keep track of a company’s finances.
That said, there is no specific number of business cards that will maximize savings for every business. The optimal number depends on the company’s budget and spending patterns, as well as whether or not the cardholder can take full advantage of each card’s rewards program, spending bonuses, and extra perks.
Why You Should Have at Least One Business Credit Card
Small businesses should have at least one credit card dedicated to business expenses because it will help keep personal and business expenses separate. This can be a real time-saver during tax season, and it can also save time if the company or the individual is ever audited.
In addition, many business credit cards provide high credit limits for extra short-term spending power. Some business cards have perks and rewards that aren’t available on personal credit cards, too, such as bonus savings on office supplies.
When to Have More Than One Business Credit Card
Once you have one business credit card, deciding whether or not to apply for another account should depend in large part on how much money the Island Approach could save you. This is when you have multiple credit cards and use each for a certain type of purchase or other transaction. For example, some businesses could benefit from having one card to use for business travel and another card for everyday expenses.
For more insight into this decision, sign up for a free WalletHub account. You will get personalized credit card recommendations and be able to use a free credit score simulator, which will help you determine how adding another credit card could impact your business and personal finances.
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