Why a Secured Small Business Credit Card can Work for You
A secured small business credit card is an excellent option for businesses just starting out. If you’re starting a small, home-based business, you might think you don’t need credit. After all, your expenses are few, and since you’re funding the entire thing anyway, why bother getting another credit card? Your personal card will do for any emergency expenses. Think again.
Keep your small business and personal credit cards separate
There are two strong arguments against this point of view. First of all, you should never mix your personal credit into your business credit. If something happens with your business, the last thing you need is for it to ruin your personal credit, too. No matter how small your business is, it’s a good idea to separate business from personal credit.
Second of all, if your business expands there may come a time when you need credit in the future. At that point you’ll be glad you have a credit record in your business’ name, enabling you to get the loans and cards you need.
Why a secured small business credit card?
A secured small business credit card is best for situations where you want to build your credit rating but don’t really want to carry a lot of debt. With a secured credit card, you open a bank account and deposit a certain amount of money that becomes your card’s backing. Your credit limit is whatever’s available in the account, so you can’t possibly overspend.
Following this procedure, make purchases and payments with the card to build your credit rating without worrying about the temptations of credit cards or accumulating debt. It is, in many ways, the best situation for a small business just starting out.
So don’t fall into the trap of thinking that a very small business doesn’t need credit. Instead, use a secured small business credit card to build that rating and protect your personal assets.
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