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Getting A Credit Card For Your Business

Updated on:  

08 min read

Banks offer many types of credit cards. One of the types of credit cards that a bank offers for business entrepreneurs and owners are business credit cards. The banks issue these credit cards in the name of your business. 

A credit card for your business is one of the best ways to manage your business smartly. These credit cards are intended for business purpose usage. They offer many benefits and features that would help you in the smooth running of your business. Any business owner can obtain a business credit card, irrespective of the size and type of business.

Choosing the Right Business Credit Card

Many banks offer business credit cards. However, you must consider the following points for selecting the right business credit card:

Business expenses 

While choosing a business credit card, analyse your expenses. When you know your business expenses, you can select the right business credit card. When your business requires huge investments or major purchases, choosing a business credit card with an introductory promotion on balance transfers or purchases can be beneficial. These offers give you around a year to pay off your business expenses without accruing interest charges.

Credit limit 

You should have an idea of the credit limit on your business credit card. Ask your bank about the credit limit on your card as a small credit limit or an enormous limit will not be beneficial. A small credit limit will be pointless as you cannot take advantage of it for your business purchases, and an enormous limit may be beyond your budget.

Credit card fees

Ask your bank about the annual fee, proceeding fee on transactions, subscription fee, etc., on your business credit card. Knowing the various fees attached to the credit card will help you decide on the right card. Also, know the interest-free credit period provided by the bank, as it will give you an idea of the interest to be paid.

Rewards  

Know the rewards and discounts available on your business credit cards. A lot of business credit cards pay cash-back or other rewards on your purchases. Having a credit card that provides rewards points or miles for travel is beneficial when your business involves a lot of travelling. Select a credit card that offers rewards and other benefits, as it will help you reduce your inventory charges.

Sign-up bonus

Business credit cards with rewards generally have a sign-up bonus that you can earn for spending a prescribed minimum amount in the first few months of obtaining the card. This bonus can give you a boost at the start, but it should be weighed against the card’s annual fee.

International use

If you are planning to grow your business abroad, select a card that does not charge for foreign transactions. A card with no foreign transaction fee will benefit you when you plan to pay for international travel or make international purchases.

Employee cards

Select a card that allows you to extend purchasing power to your employees and earn additional rewards for your business. It can be helpful if there are reward bonuses for meeting specific spending thresholds in a year.

Advantages of Having a Business Credit Card

Rewards 

You earn substantial reward points for each business purchase or expense made through the business credit card. Selecting the right business credit card can save a lot of your money as they offer exciting discounts, rewards and benefits than personal credit cards.

Track employee expenses 

You can give business credit cards to your employees and ask them to use these cards for all business expenses. When employees use a business credit card for expenses, you will receive a bill with all your business spending and employee spending every month. In this way, you can easily keep track of your employee expenses. You will not have to reimburse employees for business spending on their personal cards when they use a business credit card, thus saving your time. 

Improves business 

Business credit cards help you to improve your business. Business credit card companies offer the latest innovative business tools, tracking tools, and you can analyse your monthly credit card statement to check your expenses. Many business credit cards offer an online portal or mobile app that makes tracking and filing your business costs easy. 

Access to credit 

A business credit card gives you easy access to credit. You can use the business credit card to make purchases for your business that require a huge amount, thereby increasing your cash flow. You can purchase equipment, supplies and inventory immediately even when you do not have the necessary cash for it and pay it on the next billing cycle. 

Business expenses 

Having a business credit card helps you with your business expenses even when you do not have the cash for it. You can use the business credit card for the following purchases:

  • Business travel expenses 
  • Business operations
  • Repair and maintenance work
  • Procuring raw materials
  • Purchasing business equipment
  • Purchasing stationery and other office supplies
  • Purchasing electronic goods for business use

However, business credit cards must be used for only business-related purchases and expenses. It cannot be used for personal expenses.

Banks Issuing Business Credit Cards In India

Following are the list of banks that offer business credit cards to business owners in India:

  • Citibank
  • Axis Bank
  • ICICI Bank
  • HDFC Bank
  • State Bank of India
  • Kotak Mahindra
  • Bank of Baroda
  • Canara Bank

How to Apply For Business Credit Card

Below are the steps to apply for a business credit card in India:

Step 1: Visit the business credit card page on the bank website you are considering getting a credit card from.

Step 2: Go through the features and benefits of the business credit card listed on the website and decide whether to apply or not.

Step 3: Go through the eligibility criteria associated with the credit card and check if you are eligible to apply.

Step 4: If you are eligible as per the eligibility criteria, click on the ‘Apply Now’ button available on the bank’s credit card website page and choose the card you want to apply for.

Step 5: Fill up all the necessary details in the credit card application form.

Step 6: Attach a copy of all the necessary documents while applying for the credit card.

Step 7: The bank will process your application and contact you on the card application status.

Documents Required for Business Credit Card

Different banks may ask for different documents depending on the kind of business. Usually, for obtaining business credit cards, both personal and business documents are required to be submitted. The common documents which are required to be submitted for applying for a business credit card are as follows:

  • Identity proof of the business owner
  • Residential address proof of the business owner
  • Registered office address proof of the business
  • Business Registration/Incorporation Certificate
  • Income proof of business, i.e. profit and loss account and balance sheet
  • Proof for business continuity
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