How Do Business Charge Cards Work?

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Trying to keep on top of business expenditure when you are juggling with cheque stubs, receipts, and cash can be both difficult and time consuming, and many businesses end up spending a great deal of time trying to keep control of finances when it comes to monitoring business purchases. However, there are a number of far more convenient options available for businesses these days, one of which is the business charge card, which is offered by a range of banks and card issuers.

By using a business charge card, you can gain a tighter reign over business expenditure, making it easier and faster to keep on eye on the cost of purchases, whilst enjoying the added benefits of increased security, flexibility, and convenience.

What are the benefits of business charge cards?

Business charge cards are ideal for smaller businesses that want to enjoy flexibility and convenience without having to deal with costly interest rates. Some of the benefits that you can enjoy include:

• A specified term of interest free credit, enabling you to make purchases without having to pay with a cash or cheque upfront. This means increased flexibility and convenience, as well as easing cash flow for businesses.
• The ability to equip employees with charge cards for the account, and have pre-set spending limits on the cards. This means that you can track business expenditure more easily, no matter how many employees have to make business purchases.
• Reduction in administration is another major benefit, and you will no longer have to mess around with receipts, cheque stubs, and petty cash. Instead you can simply use the detailed monthly statements provided in order to keep track of expenditure.
• Ease and convenience is another major benefit, with the charge card eliminating the need for you or company employees to carry around cash or cheque books to make business purchases.
• Being able to make purchases abroad, as the business charge card is accepted globally and can make it far safer and more convenient to make purchases overseas.
• The added convenience of being able to pay for all of your business purchases on a monthly basis rather than paying by cash or cheque for each individual purchase.
• The ability to make cash withdrawals from cash machines.

The basics of business charge cards

The business charge card offers many of the same benefits as a credit card in terms of security, convenience, and flexibility. However, with the charge card you will not get charged interest because the balance on the account is settled in full by direct debit at the end of each interest free period. The interest free period can vary from one card to another.

Another variation between cards is the annual fee that is charged, and this is another factor that you should compare before you decide which is the best charge card for your business. Some cards also offer additional rewards with charge cards, such as discounts or reward points.

With the business charge card, you can also benefit from having supplementary cards issued to various employees, and you can pre-set limits on these to suit your needs. Your detailed statement will include purchases made by all cardholders on the account, and the combined balance is then paid by direct debit, which means that you will not get charged interest.

You will find that there are penalties for late repayments, and again these can vary from one card issuer to another and should be compared before you make your decision.

You can use your business charge card to make purchases for your business as well as to make cash point withdrawals, and these cards will make it easier to track your company expenditure as well as more secure for those responsible for making purchases.

How to choose the right business charge card

There are a number of factors that can differ between each charge card available to businesses these days, and in order to find the right card you should compare the different deals and packages and look at areas such as:

• The cost of the annual fee on the charge card
• The fee for late repayments on the card
• The availability of supplementary cards for additional employees
• The interest free period offered on the card
• Any pre-set limits set on the card
• Whether there are any membership rewards offered, such as reward points
• Whether there are any other rewards such as discounts on various business items and purchases or at certain retailers

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