Most of us don’t even think twice about it. We just pull out that personal card and start paying business expenses. No fuss, no muss.
In the early days that may be convenient. However, after your business gets legs and starts to grow, trust me, you will begin to see the disadvantages of mingling personal credit and business credit.
For one thing, you may find that if you have a lot of business expenses on your card, you will not have credit available for important personal needs, such as that long-awaited family vacation.
Or you may find your credit rating is adversely affected by nearing your credit limit on a card. Having a separate business credit card not only gives you more combined personal and business credit, but it may keep you from maxing out on any given card. And that may help preserve your personal credit rating in the process. And there are several other good reasons to have a separate business credit card.
Even if you do not like to pay on credit, in today’s world it’s difficult, if not impossible, to conduct transactions such as renting a car or reserving a hotel room without a credit card. A credit card is virtually a business necessity.
I outline the key reasons for having a separate business credit card and how to pick one, in my article about Choosing — and Using — a Business Credit Card, over at the Online Merchant Network.