How to use a business credit card

You can use a business credit card to pay for company expenses such as supplies, travel and inventory while keeping spending within your credit limit. Paying the statement balance in full each month can help you avoid interest, and tracking purchases can simplify tax preparation and help build business credit.

Keep reading to learn more about using a business credit card to support your business, and how to choose the right one for your business needs.

You can use a business credit card for things like operating costs, travel and marketing expenses:

• Operating costs: The costs associated with day-to-day business operations, like supplies, equipment and inventory.
• Travel costs: The costs associated with company-related travel, such as hotels, flights or rental cars.
• Marketing expenses: The costs associated with promoting your business, like advertising spending for social media campaigns, ad agency fees or search engine optimization services.

It is typically prohibited in the customer agreement to use your business credit card for personal expenses—such as travel costs, legal fees or medical expenses. In general, doing so can complicate bookkeeping and make tax reporting more difficult.

A business credit card can help business owners keep personal and company finances separate, access more credit, earn rewards and benefits, build business credit scores and more:

• It helps keep your finances separate. A business credit card can help separate your business and personal purchases, making expense tracking and tax preparation easier.
• It can give you access to more cash flow. Business credit cards can serve as a dedicated line of credit for business purchases, helping business owners manage cash flow and cover unexpected costs.
• It provides the opportunity to earn rewards and benefits. Many business credit cards offer rewards and benefits tailored to business owners, such as employee spending controls and travel rewards.
• It can build your business’s credit profile. Establishing a strong credit history may open doors to better financing opportunities in the future.
• It can simplify recurring payments. A business credit card can help with recurring expenses like subscriptions, memberships and travel. It ensures timely payments without disrupting your business’s cash flow.
• It can streamline expense tracking. Many business credit cards come with built-in expense management features that can help you better understand your company’s cash flow. Some might even offer the option to connect your business card to various accounting platforms, which can be useful at tax time.
• It can provide flexibility for short-term costs. A business credit card can be a lifeline for managing unexpected or short-term expenses such as large purchases, urgent repairs or seasonal inventory fluctuations.

Here are some strategies for using your business card responsibly and maximizing its benefits:

Many business credit card issuers, like Capital One Business, allow you to issue employee cards to trusted employees to make purchases on behalf of your company. Employee cards can be a convenient way to streamline business spending and reduce the need for reimbursement. But as you issue more cards, managing spending and establishing clear controls becomes increasingly important.

Setting guidelines, such as spending limits and what counts as an allowable expense, can help ensure that employee spending aligns with your company policies. This can ultimately lower the risk of misuse and make it easier to manage and track business expenses.

Avoid late payments, and do your best to pay your balance in full each cycle to minimize the cost of borrowing. This can help you avoid higher interest rates and fees, which could harm your business’s overall financial health.

Business credit cards often offer rewards, which typically come in the form of cash back or travel miles. These rewards can accrue through day-to-day business purchases and from your recurring business expenses. You can then reinvest your earned rewards in your business, whether as cash back, a statement credit, reimbursement for recent purchases or gift cards.

Business credit card issuers may consider your personal credit score, so keeping credit utilization low and making payments on time can significantly protect your personal credit scores. 

If you’re looking for a quick way to see which Capital One Business cards you qualify for—without impacting your personal credit score—you may want to consider getting pre-approved. With pre-approval from Capital One Business, you can quickly and conveniently compare cards, offers and terms you’re eligible for.

You can review your business credit card statement monthly to make sure there aren’t any unauthorized charges, errors or fraudulent activity. This way, if you notice any of these charges, you can take action immediately and contact your card issuer. Capital One Business credit cards offer enhanced security benefits, like $0 fraud liability and security alerts, to help keep your company safe.

To choose the right card for your business, start by researching different business credit cards and the benefits they offer to decide which options to prioritize. From there, you can review your business spending needs and your personal credit score to find a business card that meets your needs.

Capital One Business has a variety of cards that come standard with benefits and features like:

• No foreign transaction fees

• Access to Accounts Payable with Capital One

• Free employee cards

• Virtual cards

Here are some frequently asked questions about using a business credit card:

Using a business credit card can help you keep personal and business finances separate, simplify expense tracking and earn rewards. 

Business credit cards can offer financial flexibility, cover unexpected costs and help you build your business’s credit profile. With the right card, you can also maximize rewards to enhance and support your business’s growth.

Ready to take the next step? Compare cards from Capital One Business to discover features and benefits that can support your business growth and get pre-approved—without impacting your personal credit score.