The Top Benefits of a Small Business Credit CardSmall Business Funding•Oct 19, 2023• 6 min read
Running a small business can feel like riding a financial rollercoaster.
There are peaks and valleys, steady climbs, and sudden drops. Sometimes, you might even feel like you’re upside down.
Frank Sinatra sang it best in his classic rendition of “That’s Life”:
You’re riding high in April, shot down in May
But I know I’m gonna change that tune
When I’m back on top, back on top in June.
With a small business credit card, you can get back on top any time of the year.
By enhancing cash flow, a small business credit card can help your company streamline expenses, stimulate growth, and unlock its true potential.
Plus, you’ll enjoy sweet perks along the way (like points, cashback, and even 0% intro APR).
Read on to learn about the many benefits of a small business credit card.
What Is a Small Business Credit Card?
A small business credit card is a revolving line of credit—exclusively for, you guessed it, small businesses.
The process is simple: spend a certain amount each month, pay back what you owe, then rinse and repeat.
Sounds similar to a personal credit card, right? Sort of.
While small business and consumer credit cards have the basics in common, they are separated by several key features:
- Business credit cards have higher credit limits than personal credit cards.
- Business credit cards make it easier to separate and track expenses.
- Business credit cards help you build business credit (unlike personal cards).
While personal cards are great for daily life, they’re less than ideal for your small business.
In fact, if you use your personal card for business expenses, you’ll miss out on the amazing benefits only a small business credit card can provide.
P.S. Want to learn more about small business credit cards? Check out our comprehensive guide.
Who Should Get a Small Business Credit Card?
In our humble opinion, every entrepreneur should have a small business credit card.
That’s true if you’re a freelancer, if you recently launched your first business, or if you’re a startup veteran with multiple companies under your belt.
The advantages of a small business credit card are simply too good to ignore.
Nevertheless, there are a few specific situations where a small business credit card could be especially useful.
For example, entrepreneurs in the early stages of a business are almost always in need of cash.
Employee salaries, monthly rent, and utility bills quickly drive up overhead costs and leave little room to purchase essential products.
This kind of situation can place enormous pressure on any entrepreneur, however confident they may be.
Here’s the good news: if costs consistently outweigh revenue, a small business credit card can provide a much-needed cushion.
When strategically used, emerging entrepreneurs can easily cover their up-front expenses and repay with them down the line— while keeping your employees (and landlord) happy.
High-growth businesses have just as much to gain from a small business credit card.
For example, an established business owner may have designs to renovate their brick-and-mortar storefront.
While monthly revenue is solid, it’s not quite enough to cover their ambitious makeover plans.
By leveraging a small business credit card, however, she can easily pay for the remodeling without throwing off her balance sheet.
Plus, she can enjoy some significant cash back on her purchases and reinvest that money right back into her business.
One more thing.
By utilizing a small business credit card, both the emerging entrepreneur and the business veteran will boost their business credit.
In other words, while they’re streamlining operations (and enjoying great perks), they’re also increasing their standing in the eyes of the credit bureaus. As a result, they’ll develop higher business credit scores and broader access to other business credit products.
More on that in a minute.
The Top Benefits of Small Business Credit Cards
For a tiny piece of plastic, small business credit cards pack a mighty punch.
Here are the five major benefits they deliver:
1. Higher Credit Limits
When it comes to spending power, small business credit cards are in a league of their own.
Imagine what your business could accomplish with a higher credit limit.
When profits are down, your small business credit card could help you pay invoices, manage payroll, and cover unexpected costs.
When profits are up, you could leverage your business credit card for renovations, expansions, and new marketing activities.
More than anything, a small business credit card can provide the quiet confidence that comes from knowing your short-term cash flow is secure.
2. Strengthened Business Credit
Here’s a little known (but important) fact: your personal credit cards won’t help you build business credit.
After all, your personal and business credit histories are totally different. Your credit scores are unique, and your credit histories are reported to separate bureaus.
For example, your personal credit reports are managed by Experian, Equifax, and TransUnion, while your business credit reports are overseen by Dun & Bradstreet, Equifax Small Business, and Experian Business.
That’s why it’s important for entrepreneurs to utilize a small business credit card.
By responsibly managing your credit limit (and making payments on-time), your small business credit card will strengthen your credit profile.
As your business credit score increases, you will be able to access credit products with increasingly attractive rates and terms.
A small business credit card is crucial to long-term entrepreneurship.
3. Improved Cash Flow
While revenue is important, cash flow is the #1 indicator of a small business’s health.
After all, a positive cash flow proves that you’re able to serve your customers—and meet your financial obligations—without missing a beat.
That’s why your cash flow statement is the first document investors and banks review before partnering with your firm.
With a small business credit card, you can drive your company’s expansion and cover:
- Inventory purchases, like raw materials and major equipment.
- Recurring expenses, like rent, wages, and insurance premiums.
- Unanticipated emergencies, like storm damage or medical incidents.
Some call it a line of credit, but we think of it more as a credit lifeline.
Either way, a small business credit card will keep your cash flowing through all seasons of life.
4. Streamlined Bookkeeping
Beyond promoting cash flow and higher credit limits, the benefits of small business credit cards extend even further.
By automatically separating and tracking expenses, your small business credit card functions as a mini accounting department. Come tax season, this could help you save big on time, money, and stress.
That’s why it’s vitally important for entrepreneurs to use a small business credit card for all work-related purchases.
If you use a personal card for business expenses, you could jeopardize your bookkeeping process.
For example, if you misidentify a personal expense as a business expense, you could even get in trouble with the IRS.
A small business credit card simplifies your bookkeeping and protects you from potential audits.
That’s peace of mind no dollar amount can match.
5. Enriching Rewards
Want to get rewarded for your spending?
With a small business credit card, you can.
In fact, you’ll earn points on purchases, cash back rewards, travel benefits, statement credits, and more.
A small business credit card will invest in you—the way you invest in your company.
The only question is, which card will you choose?
Introducing the Hello Alice Small Business Mastercard®
As a small business owner, you have many credit cards to choose from.
Though the market is crowded, most small business credit cards share the same simple goal:
to reward spending.
While that’s important, we’re more interested in a higher calling: to help your business grow.
In fact, we designed the Hello Alice Small Business Mastercard® to do just that.
As a Hello Alice cardmember, you’ll gain instant access to a growing network of thought leaders, coaches, and events dedicated to your long-term success.
Inspired by startup schools like Y Combinator, our 1-1 On-Demand Business Coaching provides the mentorship entrepreneurs need most.
But that’s only the beginning.
“The card that comes with connections” also delivers sweet perks including:
- $0 annual fees1.
- 0% introductory APR.
- A $200 statement credit offer2.
- Cashback on eligible purchases2.
- Gift Cards from leading travel, dining, and retail brands.
- +100 points when you complete a Hello Alice program.
- 4x Points on telephone service and business software purchases2.
- 3x Points on office supplies and shipping purchases2.
- 2x Points on rideshares and restaurant purchases2.
- 1.5x Points on all other purchases2.
Want even more?
You can protect and enhance your business by joining the Mastercard World Elite program and its best-in-class benefits.
In addition to Mastercard ID Theft Protection and Zero Liability Protection, you’ll also receive comprehensive car rental insurance.
Plus, you’ll gain access to a 24/7 Business Assistant who manages everything from restaurant reservations and travel plans, to recommending office equipment upgrades and repairs.
Say goodbye to the old way of working.
Say hello to the card that grows your business.
Earn, Redeem, and Grow With Hello Alice
Small businesses are the heart and soul of America.
As an entrepreneur, you’re doing more than supporting the economy. You’re connecting people, families, and communities with amazing products/services and the promise of a brighter future.
At Hello Alice, we’re dedicated to guiding your business venture with funding opportunities, expert advice, and a supportive community that has your best interests at heart.
That’s why we’re thrilled to provide entrepreneurs with the Hello Alice Small Business Mastercard®—the card that comes with connections.
Interested in learning more about our card and its benefits? Check out our small business credit card features page.
Cards are issued by First National Bank of Omaha (FNBO) pursuant to a license from Mastercard International Incorporated. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated.
1For additional information about Annual Percentage Rates (APRs), fees, and other costs, please see the Summary of Credit Terms.
2For the Credit Card rewards program, see the Rewards Terms and Conditions in the Summary of Credit Terms. Please see the Hello Alice Terms of Service at helloalice.com/terms for information regarding expiration, redemption, forfeiture, and other limitations on Hello Alice points. Rewards redemptions are available online only. Please allow up to eight weeks after you qualify for the statement credit offer for it to be applied to your Account. Hello Alice points earned on Hello Alice activities cannot be redeemed for cashback.