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.
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.
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.
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.
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.
When comparing business credit card providers, the questions you may wish to ask yourself include:
Other aspects of making a business credit card comparison include:
Keeping all your business finances separate from your personal ones helps simplify tax time. So, it’s well worth considering the benefits of having a business credit card.
1. Government payments (such as tax) attract a lower points earned rate than other eligible purchases; and they exclude government charges. Refer to the terms and conditions for your relevant business credit card for more information.
Westpac’s products are subject to terms, conditions, fees and charges; and certain criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and T&Cs for Westpac savings accounts and business credit cards; and consider if the product is right for you.
The information in this article is general in nature and does not take your objectives, financial situation or needs into account. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.
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