Keep your business and private purchases separate

Information verified correct on October 22nd, 2016
businessman holding a mobile phone and a credit card

Credit cards are a good way to manage the expenses that come with running a company.

They are convenient to use and much easier to track then using cash. Each month you need only look at your statement to see how much your company spent on petrol, supplies, business lunches, and any of the other common costs of maintaining the store. However, it is important that you consider whether or not it is a wise choice to use your personal plastic for those company costs. While you might think it is simply easier to only have one card for both your personal and work expenses, it is usually not a good choice.

Benefits of having a Business Credit Card

  • Reduced risk to your personal finances

    Even though you are the owner of a company, you do not have to take on all of the personal financial risks of that company. If you have plastic that is in the name of your company instead of yourself then the company is ultimately responsible for the debt. Should your company fail, your personal credit standing will not be affected. By the same token, if you use a personal card for business purchases then you will have less access to cash. That could mean, you will not be able to make personal expenditures when you need to do so. It could also increase your debt to income ratio which may preclude you from getting new cards or cause your issuer to increase your interest rate.

  • It keeps your finances in order

    You could spend a lot of time trying to figure out which expenses were personal and which were for work, but there is always the potential for error. When that happens, you could wind up claiming expenses on your company taxes that were actually personal or leaving expenses off that were work related. If you have a completely separate account, you never have to worry that your finances will get mixed up. You simply have one for yourself and one for the company.

  • You get all of your rewards

    Even if you have an excellent rewards scheme on your personal plastic, it might not be valid if you are using it for company costs. One obvious situation is travel insurance. If you were to book a business trip on your personal card, you would probably not be able to take advantage of the travel insurance. Most of the time if it is issued from a personal card, it is stipulated that it cannot be used for company travel.

Getting a company credit card is ideal for loads of reasons, the ones listed here are just the tip of the iceberg. There are other benefits too, like the ease of managing money so that you do not need a cash box or a full time bookkeeper. You will also be able to have cards made for your employees that have special restrictions which give you ultimate control over their spending too.

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Credit Cards Comparison

Rates last updated October 22nd, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
HSBC Platinum Credit Card
Receive a full annual fee refund and save $149 if you meet the $6,000 spend requirement. Enjoy a balance transfer offer and platinum card benefits such as complimentary insurances and concierge services.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
NAB Low Rate Credit Card
The NAB Low Rate Card offers 0% p.a. on purchases and balance transfers for 15 months. This card also comes with a low annual fee.
0% p.a. for 15 months (reverts to 13.99% p.a.) 0% p.a. for 15 months with a one off 3% balance transfer fee $59 p.a. Go to site More info

* The credit card offers compared on this page are chosen from a range of credit cards has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing cards.

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