How to Use a Business Credit Card Like a Pro

Running a small business means keeping track of a lot of things, including your money. Business credit cards can be a smart tool that helps you separate your business expenses from your personal ones. Whether you’re buying business supplies, booking business travel or covering your day-to-day expenses, using a business credit card the right way can make your life as a small business owner easier.

Using your card wisely takes a little planning. From tracking your spending to managing your rewards, a few key habits can help you use a business credit card like a pro so you can stay organized, build credit and keep your business growing.

How do business credit cards work?

A business credit card is a credit card that’s specifically intended for business use. It’s important to keep your personal and business expenses separate so you can run and grow your business while helping protect your individual finances. This also simplifies bookkeeping and builds business credit history under your company’s name if the card issuer reports to business bureaus.  

Business credit cards may offer higher credit limits than personal credit cards. Some also may have unique features that personal cards don’t, such as: 

• Detailed expense reporting to help simplify tax prep
• Rewards that match everyday business spending categories like office supplies, travel and advertising
• The ability to build business credit history
• The ability to add employee cards with individual spending limits

With a Navy Federal business credit card, you can earn rewards on purchases and have multiple cardholders on your account. 

When used properly, business credit cards are a great tool for managing business-related expenses wisely. 

What business expenses should you use a credit card for?

A business credit card is perfect for expenses that help keep your business running smoothly. The key is to use it for purchases that are clearly tied to your business—not for personal expenses. This makes it easier to track spending, earn rewards and stay organized when you must work on your taxes. 

Before you swipe, make sure the purchase you’re considering is a business expense. Common business-related categories include: 

• Travel and transportation like flights, hotels, rental cars and meals on business trips.
• Office supplies and equipment like computers, software, furniture, paper and printer ink.
• Marketing and advertising like social media ads, print materials and promo items.
• Professional services like legal fees, tax and accounting fees, business consulting and insurance.
• Utilities and subscriptions like internet, software subscriptions and memberships.
• Inventory and raw materials for retail businesses or manufacturing operations.

What to avoid putting on your business credit card

Your business credit card is for responsible business purchases. Here are a few things to avoid using your business card for:

• Personal expenses. These blur the line between business and personal finances, and it’s important to keep them separate.
• Cash advances. These usually come with immediate fees and interest charges that can end up costing your business more money than you might expect.
• Purchases you can’t pay off easily. Stick to purchases you can pay off in full each month so your card is a helpful business tool, not a source of debt.

10 strategies to help you with your business credit card

To get the most from your business credit card, you need to do more than just spend wisely. With a few simple strategies, a business credit card becomes a tool for improving cash flow, earning rewards, managing finances and even protecting your business. 

Keep these tips in mind as you get into the habit of using your business credit card:

1. Time your bill payments. 

Pay your full balance after your statement closes, but before the due date. This gives you 20-25 days to manage cash flow. You’ll avoid interest charges and build a positive payment history. Wait to make large purchases until right after the statement closes so you’ll have more flexibility in your payments. 

2. Set up automatic minimum payments. 

Even if you plan to pay your bill manually, you can use autopay as a safety net to help avoid expensive late fees. This helps if you forget your due date or if you’re facing unexpected issues. 

3. Keep spending below 30% of your credit limit. 

This helps you keep your good credit score and gives you a buffer for unexpected business expenses. That’s especially important for seasonal businesses that experience swings in cash flow. 

4. Set some ground rules. 

Your general credit limit should align with typical business spending. Individual employee business credit cards should come with credit limits that reflect their specific roles and responsibilities. Document your approved expense categories, employee spending limits and consequences for violations.

5. Monitor usage weekly.

Regularly monitoring card usage can help catch any mistakes or fraud early. It also helps you stay on budget, avoid surprising bills and spot trends in your spending. 

6. Take advantage of your card’s bonus categories. 

Many cards offer higher rewards for office supplies, gas or travel. Set calendar reminders to time your purchases strategically so you can maximize cash back and rewards opportunities. 

7. Earn and spend rewards wisely. 

Redeem rewards regularly, but don’t overspend to earn them. Prioritize paying the full balance over any potential rewards you might earn from spending. Cash out or use your rewards to keep your bills lower.

8. Monitor business credit reports. 

If your card issuer reports to business credit bureaus, check your business’ credit report errors. It can take some time to see results, so focus on consistent good habits to build your foundation. 

9. Use card controls and real-time alerts. 

Many cards let you set up spending notifications and temporarily freeze cards. These features can help you if your card is ever lost, stolen or improperly used. 

10. Report lost cards immediately. 

Know your issuer’s dispute process and keep documentation for disputed charges. Business cards often have higher limits, so it’s critical to act quickly on lost or stolen cards.

Business credit card benefits and potential drawbacks

Like any financial tool, business credit cards come with both pros and cons. Knowing both helps you decide when and how to use your card wisely.

Navy Federal Credit Union is here to help you with your business needs

Smart business credit card usage starts with a card that supports your spending habits. At Navy Federal, we offer business credit cards with features that help you spend wisely and manage your business’ finances. You also can explore our business education center for more tips on how to start and grow your business.