Credit cards aren’t just products that make cashless purchases more convenient. They can also be an invaluable asset for business owners, especially to those who are still just at the beginning of their entrepreneurial journey. Seeing as running a business requires a substantial amount of capital and resources, many business owners rely on credit cards for short-term financing. This credit line can be used for urgent business expenses or to cover for operational costs. Moreover, credit cards can help entrepreneurs easily monitor their respective business’s expenses through monthly statements and by checking through their spending history via their card’s accompanying app.
If you’re an aspiring entrepreneur, a credit card may be a boon companion as you build your own business. You can start by researching for a credit card online application Philippines’ business owners can conveniently accomplish, such as one that doesn’t require tons of paperwork and can get you approved within minutes.
The Landers Cashback Everywhere Credit Card from Maya is one such card that you can get for your future business. You can easily apply for the card through your Maya app so long as you have an active Landers membership account, and this will allow you a credit line that you can use for buying business supplies or other expenses as soon as possible.
That being said, having a credit card is a huge responsibility—especially if your goal is to build good credit and demonstrate good financial discipline to anyone who may work with you or invest in your business. To that end, here are some tips that will help you practice using your business’s credit card more responsibly:
1) Set a Dedicated Business Budget
Just because you’ve got a readily available credit line, it doesn’t mean that you can justify reckless spending. Rather, having a credit card solely for your business should further motivate you to start setting a budget so that you can avoid putting your business in bad debt. A well-defined budget also ensures that every peso spent aligns with your business goals.
When planning your business budget, consider setting budget limits for different categories such as utilities, inventory, marketing, and the like. This should help you get a clearer picture of where your money is going and which category deserves a greater budget allocation.
2) Use Your Credit Card Exclusively for Business Expenses
Once you get approved for a credit card that you intend to use exclusively for business, it can be tempting to use it for personal purchases at times. But one of the first lessons you should learn as an entrepreneur is that, as much as possible, you shouldn’t mix personal and business transactions. This can create confusion in bookkeeping, which can also make your business matters more complicated than they should be.
Try to keep your transactions on your business’s credit card solely for business purposes to avoid further issues. Practicing this habit also prevents unnecessary personal spending, ensuring that your business budget is used only for its intended purposes.
3) Take Advantage of Rewards and Perks Wisely
Credit card perks and rewards aren’t just useful for personal expenses. They can also benefit your business’s cash flow as well. Make sure you thoroughly review your credit card’s rewards program and see how you can utilize reward points and cashback offers to save on your business expenses.
For instance, if you got a Landers Cashback Everywhere Credit Card for your business, then you’d know that it can give you up to 5% cashback at Landers Superstore, 2% on dining spends, and 1% on all other qualified transactions. The cashback can be incredibly helpful when restocking your business supplies, allowing you to save money on essentials.
4) Regularly Monitor Your Spending
Financial discipline can also be reinforced through regularly monitoring your business transactions. Doing so encourages you to be more aware of your spending habits and thus stay on track. For example, if you notice on your card’s transaction history that you’ve been spending a lot on non-business purchases as of late, then this can be a wake-up call to fix your spending habits.
Your effort to monitor your business transactions regularly will also help you detect fraud or unauthorized charges early and put you in a better position to address issues promptly. Consider setting a schedule for these reviews, ideally weekly or bi-weekly, to ensure that expenses align with your business goals.
5) Understand the Terms and Fees
Every credit card comes with fees such as interest rates and late payment penalties. As an aspiring entrepreneur, you should always be thorough in your grasp of these terms and fees to avoid unpleasant surprises that could impact your budding business’s finances. In addition, make sure that you know your credit card’s cutoff dates and payment deadlines by heart to prevent any late fees that will potentially throw off your business budget.
6) Pay the Balance in Full Each Month
Carrying a balance month to month incurs high interest, which can quickly erode your business profits. Pay off your credit card’s full balance to avoid unnecessary interest costs and free up your credit line for future expenses. This habit will also demonstrate financial discipline, which is critical if you plan to seek larger loans or lines of credit for your business down the road.
Credit card discipline is essential for you as an aspiring entrepreneur towards making sure that you’re able to create a strong financial foundation for your business. Remember the tips above each time you swipe your credit card for business expenses, and you’ll have a good start towards staying mindful about your spending and keeping your business’s finances healthy.
