I’ve had personal credit cards for several decades, and I’ve even had corporate credit cards from a couple of employers. But this summer, I became the first-time holder of a credit card for my own business.
Boy, do I feel like a grown-up.
On Aug. 6, I applied for a business credit card after having been a full-time freelance writer for three months. The next day, my application was approved. FedEx delivered my American Express SimplyCash Plus business credit card a few days later.
The card – with my name and the name of my limited liability corporation (LLC) emblazoned on the front – came with a frighteningly generous credit limit.
So, why did I take the plunge and get a business credit card when I’ve already got several personal credit cards? There’s one simple reason: I want to keep my business expenses separate from my personal expenses.
To be sure, my business expenses are pretty low. There’s very little overhead when you’re a freelance writer and don’t employ anyone, so I don’t put many charges on my business credit card.
Typically, the business expenses I do put on my new card are bigger-ticket items, such as conference registrations, hotel stays, airfare, website design and web-hosting fees, and monthly rent for a desk at a co-working space here in Austin, Texas.
Also, I switched payments for my monthly wireless bill from my personal debit card to my new business card. Why? For one thing, I can take a business tax write-off for at least some of my wireless bill since I use my smartphone for work. For another, I can supercharge rewards with my business card, which earns 5 percent cash back on wireless services charged on my business credit card.
My business credit card also provides the option to earn 3 percent cash back in one of eight rotating categories, along with 1 percent cash back on other purchases.
So, aside from helping me keep personal and business expenses in different buckets, my new business card delivers some cash back. It’s never going to be an enormous amount each month, but it’s better than the cash back I get from my business debit card – which is $0.
Even better: The business credit card offers an introductory nine-month APR of 0 percent and has no annual fee.
At this very moment, I’m carrying a balance on the card, which I don’t intend to do regularly. But since I’m temporarily covered by that 0 percent APR, I can put off erasing the balance as I await payment of a few hefty invoices.
After the introductory rate expires in May 2018, the purchase APR rises to 18.24 percent. At that interest rate, it will be imperative I pay off my monthly balance in full or at least as much of the balance as I can each month.
By the way, I didn’t pick this card without doing some shopping online. It would be careless of me to make a hasty decision about which business credit card to acquire without investigating annual fees, APRs and rewards. If you have a business or side gig, you should do your research on business credit cards before applying for one.
Just as with any credit card, my new business card must be used responsibly.
If I handle the card haphazardly, my personal credit history and credit score could be wrecked. The issuer of my business card reports negative information, such as late payments, to the three consumer credit bureaus.
Credit-reporting practices vary widely among card issuers, so if you’re hunting for a business card, be sure to inquire whether your card activity will show up on a consumer credit report, a commercial credit report or both.
If you take the same leap getting a business credit card that I did, be a grown-up when it comes to managing your new card. Resist the urge to splurge on personal purchases that shouldn’t go on your business card and commit to paying off the balance each month.
A business credit card is nothing to kid around with.
See related: 7 things to know about business credit cards, Our best business cards, 6 reasons entrepreneurs should get a business credit card, Dangers of putting business expenses on a personal card, Almost all business credit cards require a personal guarantee