4 reasons to want a business credit card

When you start a business, it can be tempting to use your personal credit card for work expenses. But what starts as simple one-card convenience could lead to complications when it comes to tax time – and you may be missing out on the benefits of business credit cards.

1. Helps you separate your expenses at tax time

The short-term fix of using your personal credit card for business purposes can become a long-term hassle when pulling details together for your Business Activity Statement (BAS) and end of financial year reporting.

 

It’s generally considered to be a good idea to separate your business banking from your personal banking, and that includes your credit cards. With one credit card for personal expenses and a separate credit card for business expenses, you’ll be able to see exactly what you’re spending in each area – whilst avoiding the need to wade through and separate transactions at tax time.

2. Assists with cash flow

Sometimes in business, especially in retail, you can experience ups and downs in your sales – including predictable seasonal swings. When this happens, you could draw on your savings or use a business credit card to smooth out your cash flow. 

 

Then, when you receive more sales, you can top up your savings or pay off your business credit card balance. Also, if you need to purchase equipment or a large amount of stock, a business credit card can help you manage these larger, once-off expenses.

3. Rewards you for your business spending

If you use a rewards business credit card for your business spending, you can receive points each time you make eligible purchases – which include government payments such as tax¹. These rewards can then be redeemed for flights and much more.

 

With Westpac’s BusinessChoice Rewards Platinum Mastercard® for example, you’ll earn Qantas Points you can use on flights, hotels, car hire and a variety of purchases. Choose a Westpac Altitude Business Gold Mastercard or Altitude Business Platinum Mastercard and the points you earn can be redeemed for all manner of goods. Or they can be converted to frequent flyer points with various airlines.

4. Empowers your staff with spending responsibility

If your team members are frequently out on the road or meeting customers, you could give them a business credit card with a low limit set rather than having to reimburse them for every business purchase they make. 

 

With the Westpac BusinessChoice Rewards Platinum Mastercard for example, you can order up to nine credit cards for your people.  

How do I choose the right credit card for my business?

When comparing business credit card providers, the questions you may wish to ask yourself include:

 

• Is a low fee credit card my biggest priority?
• Is having a rewards credit card important to me? 
• How many credit cards do I need for my business?
• What credit limit do I need?

 

Other aspects of making a business credit card comparison include:

 

• Interest rates
  
• Interest free periods
• Any insurance offered.

 

Westpac has a tool that allows you to compare the business credit cards that you can apply for in Westpac online banking.