If you’re setting up a new business or just thinking about it, now’s the time to consider a business travel credit card. There’s no need to wait until your business is established to apply. Getting the right card early can help you earn points and establish the financial foundation your business needs to grow and thrive.
Here we lay out the top reasons you should consider a business travel credit card early on in your startup journey.
Establish Business Credit
Some business travel credit cards can help build business credit history by reporting to credit bureaus. While this is not a feature of all cards, it’s worth considering if establishing business credit is a priority for your startup. An improved business credit score can help your business access more financing with better terms and interest rates in the future.
Secure a Higher Credit Limit
While banks are often conservative with business-related credit limits, some business credit cards can offer higher credit limits than personal credit cards. This is an important consideration for startups, especially when you may have higher purchasing needs to establish your business. A higher credit limit gives you more cash flow flexibility to deal with any large or unexpected purchases as you set up your business.
Use the Welcome Bonus
Many travel credit cards offer large welcome bonuses if you meet the cards’ spend limits. For instance, earn 50,000 points if you spend $9,000 in the first three months. Or earn 70,000 points if you spend $35,000 in the first year. As you set up your business, you’re likely spending on equipment, software, and travel, making this an ideal time to hit that threshold without stretching your budget.
Manage Cash Flow
With a business travel credit card, you can often take advantage of an interest-free grace period after your statement date. During this time, you’re not charged interest as long as you’re not carrying a balance. This can allow you a long interest-free window (usually the month-long statement cycle, plus the grace period), providing more breathing room to manage short-term start-up expenses.
Keep Business and Personal Expenses Separate
A credit card makes it easy to keep your business and personal expenses separate. Using your business credit card exclusively for business expenses and your personal card for personal purchases gives you a clearer understanding of your business’s financial health and can simplify expenses at tax time. The earlier you separate your expenses, the better. If you wait until you’re years in, it becomes more difficult to untangle and can potentially lead to tax implications.
Track Business Expenses
With a business travel credit card, it’s easy to track all of your start-up spending all in one place. You can create spending categories to help visualize where you’re spending money. Many cards allow you to set up spend alerts where you’re notified by phone or email if you’re approaching your credit limit.
Control Employee Spending
The right business travel credit card can help you manage employee spending. By setting up individual cardholder spending limits for purchases and cash advances, you can ensure each employee sticks to the business’s travel policy. Plus, you have the opportunity to maximize rewards points by combining everyone’s spending.
Earn Rewards and Perks
As you establish your business, buying equipment, paying for software subscriptions, and taking clients out to dinner, a business credit card can help you start earning rewards and perks early. If you wait until after your business is established to get a credit card, you miss a ton of earning opportunities. If you have to do a lot of travel early on as you set up your business, the right business travel credit card can help you save on everything from flights and hotels to gas and rental cars. Some cards even allow you to pool points between your business and personal credit cards, helping you maximize your rewards.
Protect Your Team
Many business travel credit cards offer a range of insurance coverage, including trip cancellation and interruption, car rental collision, flight delay, and lost baggage. You can save money by using your card’s travel insurance instead of buying standalone insurance policies for you and your team.
Start Building Business Credit Today
It’s never too early to start establishing your business credit. If you’re in the process of starting a business or you’re still in the concept phase, a business credit card can help you begin to establish your financial foundation from day one. For startups, choosing the right card is imperative. Whether you prioritize travel rewards or low rates, CIBC offers a range of business credit card solutions tailored to your business needs.
