Using a business credit card to manage daily expenses can be a great way to consolidate costs, build a margin into your cash flow, and earn valuable rewards on purchases you’re already making. But if you’re not careful, this helpful financial tool can quickly become a liability for your business. Avoid these three mistakes. 

  1. Mixing business and personal expenses. It’s essential to keep your business and personal spending separate. Failing to do so is a recipe for a headache come tax time, and could lead to scrutiny from the IRS.
  1. Spending without a plan. When you’re attempting to get a small business off the ground - particularly with a shiny, new high-limit business credit card in hand - it’s easy for every potential expense to feel like an absolute need. 

There’s nothing wrong with investing in your business in a smart, systematic way. But if you’re busting out that business credit card day after day without a budget, a repayment plan, or any forethought about the return on your investment, you’re setting yourself up for trouble ahead.

  1. Ignoring interest rate changes. While you may have been able to find a business credit card that offers 0 percent APR to start, those terms often change somewhere between six and nine months. This opportunity only works if you’re paying strict attention to the fine print. The moment that introductory period ends, your interest rate will typically skyrocket up to at least 18 to 20 percent (and very often higher). When that happens, if you’re sitting on a massive credit card balance, you’ll be looking at a mountain of interest expenses.
Published on: Dec 10, 2017